QuestionQ217

VerifiedRisk Management

You are the project manager for the GHE Project. You have identified the following risks, with the characteristics shown in the figure:

Question Image

How much capital should the project allocate to the risk contingency reserve?

Explanation

A contingency reserve is based on the total expected monetary value of identified risks. The combined expected monetary value is −$23,750, so $23,750 should be set aside to cover the project’s net risk exposure.

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