Residual Risk

Importance of Residual Risk:
Understanding residual risk is crucial for effective risk management in projects. It helps project managers assess the remaining risk after implementing risk responses and make informed decisions about risk acceptance or further mitigation.

What is Residual Risk?
Residual risk refers to the risk that remains after risk responses have been implemented. It is the level of risk that the project team is willing to accept and manage throughout the project lifecycle.

How Residual Risk Works:
1. Identify risks and assess their probability and impact.
2. Develop and implement risk responses to mitigate or eliminate identified risks.
3. Re-evaluate the risks after implementing the risk responses to determine the residual risk.
4. Decide whether the residual risk is acceptable or if further risk responses are needed.
5. Monitor and manage residual risks throughout the project.

Answering Questions on Residual Risk in an Exam:
1. Read the question carefully and identify the key information about the risk scenario.
2. Determine the initial risk level based on the probability and impact.
3. Identify the risk response implemented in the scenario.
4. Assess the effectiveness of the risk response in reducing the risk level.
5. Determine the residual risk after implementing the risk response.
6. Select the answer option that best represents the residual risk level or the appropriate action to take based on the residual risk.

Exam Tips: Answering Questions on Residual Risk
Tip 1: Remember that residual risk is the risk that remains after implementing risk responses.
Tip 2: Consider the effectiveness of the risk response in reducing the probability or impact of the risk.
Tip 3: Evaluate whether the residual risk is within the project's risk tolerance or if further action is needed.
Tip 4: Pay attention to the specific question being asked, whether it is about the level of residual risk or the appropriate action to take based on the residual risk.