International Project Management Association (IPMA) Practice Exam

Which risk management step involves evaluating the potential impacts of identified risks?

1. Response Planning

2. Risk Identification

3. Risk Assessment

4. Monitoring and Control

The correct answer is: Risk Assessment

The step in risk management that involves evaluating the potential impacts of identified risks is risk assessment. This phase is crucial as it allows project managers to analyze how various risks can affect the project's objectives, including scope, timeline, costs, and quality. During risk assessment, risks are not only identified, but they are also prioritized based on their likelihood of occurrence and the severity of their impact on the project. This thorough evaluation provides the necessary information to make informed decisions about which risks require mitigation or management strategies, thereby enhancing the project's overall resilience and success. In contrast, response planning focuses on developing strategies to address identified risks, such as implementing prevention measures or creating contingency plans, while risk identification is about recognizing potential risks in the first place. Monitoring and control, on the other hand, involve ongoing tracking of identified risks and the effectiveness of risk management strategies throughout the project lifecycle. Each of these steps is essential, but risk assessment distinctly emphasizes the evaluation of potential risk impacts, making it the accurate answer to the question.