PMI Risk Management Professional (PMI-RMP) — Question 151

A project manager and risk manager are working on a new hotel development project for their organization and have completed the risk analysis processes for the identified risks. They determined that the organization might not be able to handle the consequences of some of the high-priority risk items, and the project's objectives and designs cannot change. The team is preparing risk responses for these high-priority risks.

Which risk response strategy will effectively manage these high-priority risks?

Answer options

• A. Risk mitigation
• B. Risk avoidance
• C. Risk escalation
• D. Risk transference

Correct answer: C

Explanation

Risk escalation is the correct strategy because it involves raising the issue to higher management or stakeholders when the organization cannot handle the risk internally. Risk mitigation aims to reduce the impact or likelihood of the risk, risk avoidance seeks to eliminate the risk entirely, and risk transference involves shifting the risk to another party, none of which suit the scenario where project objectives cannot change.