Domain 3 of 3 · Chapter 5 of 8

Planning and Managing Risk

Unlock the complete study guide + 1,040 practice questions across 16 full exams.

Bundled into the existing Project Management Professional premium course — no separate purchase.

14-day money-back guarantee — no questions asked.

Included in this chapter:

  • The risk loop: plan, identify, analyze, respond, monitor
  • Analyzing risk: qualitative screen, then the numbers
  • Choosing a response: strategy, owner, escalation
  • After the response: reserves, residual and secondary risk
  • Exam-pattern recognition

Threat strategies and their opportunity mirrors

Intent of the responseThreat (negative risk)Opportunity (positive risk)
Remove the uncertainty entirelyAvoid: eliminate the threat or shield the project from itExploit: act to make sure the opportunity is realized
Give it to a third party better placedTransfer: shift impact and response ownership (insurance, warranty, fixed-price contract)Share: allocate ownership to a partner who can capture it (joint venture, teaming)
Change the odds or the sizeMitigate: reduce probability or impact to an acceptable levelEnhance: raise probability or positive impact
Hand to a higher authorityEscalate: the response is beyond the project's authorityEscalate: the opportunity is beyond the project's scope to pursue
Take no proactive actionAccept: acknowledge it; active acceptance sets a contingency reserveAccept: do not chase it, but take advantage if it arrives

Decision tree

Within project authority to act?Can you eliminate the threat?Better handled by a third party?Worth reducing probability or impact?Escalateto program, portfolio, or org ownerAvoidTransferinsurance, warranty, fixed priceMitigateAcceptset a contingency reserveNoYesYesYesYesNoNoNo
Cheat sheet

Cheat sheet

  • The risk management plan defines how risk work is done
  • Risk-process rigor is tailored to complexity and risk tolerance
  • Identified risks are recorded in the register with cause, category, and owner
  • Risk identification continues throughout the project
  • Qualitative analysis prioritizes risks by probability and impact
  • Quantitative analysis models risks' numeric effect on objectives
  • EMV prices a single risk; decision trees compare options under uncertainty
  • Distinct response strategies exist for threats and for opportunities
  • Each risk response has an accountable owner
  • A risk beyond the project's authority is escalated to the right owner
  • When a response underperforms, reassess the risk before heavier action
  • Monitoring watches for secondary and residual risks
  • The status and impact of risks are communicated to stakeholders
  • Security and sustainability risks run through the standard risk process
  • Contingency reserve covers known risks; management reserve covers unknowns

Unlock with Premium — includes all practice exams and the complete study guide.

Also tested in

References

  1. Quantifying risk Blog
  2. Collaborative tools and techniques to build the project risk plan Blog
  3. Project risk management: another success-boosting tool in a PM's toolkit Blog
  4. Top ten mistakes made in managing project risks Blog
  5. How to link the qualitative and the quantitative risk assessment Blog
  6. Expected monetary value: choices and risk impact Blog
  7. Effective strategies for exploiting opportunities Blog
  8. Risks aren't always negative Blog
  9. The Standard for Risk Management in Portfolios, Programs, and Projects
  10. Project reserves: a key to managing cost risks Blog
  11. PMP Examination Content Outline (July 2026)