A program manager identifies a risk with a potentially high impact on a key benefit. After analysis, the team concludes that avoiding the risk entirely would require sacrificing a major program objective, and transferring the risk is not cost-effective. Which of the following actions represents the most suitable risk response strategy?
Purchase insurance to cover the potential financial losses from the risk event.
Implement actions to reduce the probability and/or impact of the risk to a level within the program's risk threshold.
Modify the program management plan to remove the associated benefit and program objective.
Proceed with program activities and address the risk's consequences only if the event occurs.
The correct answer is to implement actions to reduce the risk's probability or impact. This strategy is known as mitigation. It is the most appropriate response when a risk cannot be feasibly avoided or transferred but is too significant to simply accept without action. Passively accepting a high-impact risk is not prudent. Modifying the plan to remove the benefit is a form of avoidance, which the scenario deems undesirable. Purchasing insurance is a form of transfer, which was determined not to be cost-effective.
Ask Bash
Bash is our AI bot, trained to help you pass your exam. AI Generated Content may display inaccurate information, always double-check anything important.
What are the different risk management strategies?
Open an interactive chat with Bash
Why can't all risks be completely eliminated?
Open an interactive chat with Bash
What is a risk management plan?
Open an interactive chat with Bash
PgMP
Program Life Cycle Management
Your Score:
Report Issue
Bash, the Crucial Exams Chat Bot
AI Bot
Loading...
Loading...
Loading...
Project Management Package Join Premium for Full Access