PMI Risk Management Professional (PMI-RMP) — Question 113

A risk is identified and documented by the risk manager, but it is unclear how this risk can be proactively managed. In this situation, what type of reserve should be allocated for the risk?

Answer options

• A. Contingency
• B. Management
• C. Budget
• D. Residual

Correct answer: A

Explanation

A Contingency reserve is specifically designed to address unforeseen risks that cannot be proactively managed. Management reserves are typically used for unknown unknowns, while Budget reserves are general funds not allocated for specific risks. Residual risks are those that remain after risk management measures have been implemented, and therefore do not require a specific reserve allocation.