PMI Scheduling Professional Certification (PMI-SP) Practice Exam

What is quantitative risk analysis?

1. The process of converting project risk impact into numerical terms

2. A method for eliminating risks from a project

3. A framework for assessing project success

4. A system for managing stakeholder expectations

The correct answer is: The process of converting project risk impact into numerical terms

Quantitative risk analysis is defined as the process of converting project risk impacts into numerical terms. This approach involves the use of statistical methods and tools to assess the probability of various risks and their potential impact on project objectives, such as time, cost, and scope. By quantifying these risks, project managers can make more informed decisions about resource allocation, risk mitigation strategies, and overall project planning. This process typically involves the use of techniques such as Monte Carlo simulations, decision tree analysis, and sensitivity analysis, all of which provide a numerical basis for understanding risks. The resulting data helps stakeholders to visualize potential outcomes and prioritize which risks need to be addressed first based on their severity and likelihood. This ultimately enables better risk management and enhances the likelihood of project success. The other options create misunderstandings about the nature of quantitative risk analysis. Eliminating risks from a project does not represent the analysis itself but is more aligned with risk avoidance strategies. Likewise, a framework for assessing project success and a system for managing stakeholder expectations do not focus specifically on quantifying risks, which is the cornerstone of quantitative risk analysis.