11 PROJECT RISK MANAGEMENT

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11.1 Plan Risk Management	The process of defining how to conduct risk management activities for a project.
11.2 Identify Risks	The process of determining which risks may affect the project and documenting their characteristics.
11.3 Perform Qualitative Risk Analysis	The process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.
11.4 Perform Quantitative Risk Analysis	The process of numerically analyzing the effect of identified risks on overall project objectives.
11.5 Plan Risk Responses	The process of developing options and actions to enhance opportunities and to reduce threats to project objectives
11.6 Control Risks	The process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project.
Project risk is	an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, and quality. A risk may have one or more causes and, if it occurs, it may have one or more impacts. A cause may be a given or potential requirement, assumption, constraint, or condition that creates the possibility of negative or positive outcomes
Known risks are those	that have been identified and analyzed, making it possible to plan responses for those risks
Unknown risks	cannot be managed proactively and therefore may be assigned a management reserve. A negative project risk that has occurred is considered an issue.
Overall project risk represents	the effect of uncertainty on the project as a whole. It is more than the sum of the individual risks within a project, since it includes all sources of project uncertainty. It represents the exposure of stakeholders to the implications of variations in project outcome, both positive and negative.
Risk appetite	which is the degree of uncertainty an entity is willing to take on in anticipation of a reward.
Risk tolerance	which is the degree, amount, or volume of risk that an organization or individual will withstand.
Risk threshold	which refers to measures along the level of uncertainty or the level of impact at which a stakeholder may have a specific interest. Below that risk threshold, the organization will accept the risk. Above that risk threshold, the organization will not tolerate the risk.
Positive and negative risks are commonly referred to as	opportunities and threats
Participants in risk identification activities may include the following	project manager, project team members, risk management team (if assigned), customers, subject matter experts from outside the project team, end users, other project managers, stakeholders, and risk management experts.
The risk register is a	document in which the results of risk analysis and risk response planning are recorded. It contains the outcomes of the other risk management processes as they are conducted, resulting in an increase in the level and type of information contained in the risk register over time.
Risk probability assessment investigates the	likelihood that each specific risk will occur.
Risk impact assessment investigates the	potential effect on a project objective such as schedule, cost, quality, or performance, including both negative effects for threats and positive effects for opportunities.
Risk data quality assessment is a technique to	evaluate the degree to which the data about risks is useful for risk management. It involves examining the degree to which the risk is understood and the accuracy, quality, reliability, and integrity of the data about the risk.
Perform Quantitative Risk Analysis is performed on	risks that have been prioritized by the Perform Qualitative Risk Analysis process as potentially and substantially impacting the project’s competing demands
Other purposes of the Control Risks process are to determine if:	• Project assumptions are still valid, • Analysis shows an assessed risk has changed or can be retired, • Risk management policies and procedures are being followed, and • Contingency reserves for cost or schedule should be modified in alignment with the current risk assessment.

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