A project manager is evaluating a risk with an estimated probability of occurring at 30% and an anticipated financial impact of $20,000 should the risk materialize. What is the risk score for this risk?
$6,000
$30,000
$14,000
$20,000
To calculate the risk score, multiply the probability of the risk occurring (as a decimal) by the potential financial impact if the risk occurs. Thus, a risk with a 30% probability (0.3 when converted to a decimal) and a financial impact of $20,000 would have a risk score of 0.3 * $20,000 = $6,000.
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