You are the project manager of the KJH Project and are working with your project team to plan the
risk responses. Consider that your project has a budget of $500,000 and is expected to last six
months. Within the KJH Project you have identified a risk event that has a probability of .70 and
has a cost impact of $350,000. When it comes to creating a risk response for this event what is the
risk exposure of the
event that must be considered for the cost of the risk response?

A.
The risk exposure of the event is $350,000.

B.
The risk exposure of the event is $500,000.

C.
The risk exposure of the event is $850,000.

D.
The risk exposure of the event is $245,000.

Explanation:

The risk exposure for this event is found by multiplying the risk impact by the risk probability.
Risk Exposure is a straightforward estimate that gives a numeric value to a risk, enabling different
risks to be compared.
Risk Exposure of any given risk = Probability of risk occurring x impact of risk event
= 0.70 * 350,000
= 245,000
Answer A is incorrect. $350,000 is the impact of the risk event.
Answer B is incorrect. $500,000 is the project’s budget.
Answer C is incorrect. $850,000 is the project’s budget and the risk’s impact.