A project manager is prioritizing risks for an upcoming phase. Risk A has a probability of 0.3 and an impact score of 0.8. Risk B has a probability of 0.6 and an impact score of 0.5. Which of the following statements accurately reflects the prioritization of these risks based on their risk scores?
Both risks have an equal priority as their risk scores are the same.
Risk B should be prioritized higher than Risk A because it has a higher probability.
Risk A should be prioritized higher than Risk B because it has a higher impact.
Risk B should be prioritized higher than Risk A because its risk score is greater.
To determine the priority of these risks quantitatively, the risk score is calculated by multiplying the probability and impact.
Risk A Score = Probability (0.3) x Impact (0.8) = 0.24
Risk B Score = Probability (0.6) x Impact (0.5) = 0.30
Since Risk B's score (0.30) is higher than Risk A's score (0.24), it should be prioritized higher. While individual factors like probability or impact are important, the combined score provides a more comprehensive basis for prioritization.
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