---
title: "Risk"
subject: "ICT Project Management"
chapter: 12
key: "semester_7/ict_project_management:define-risk"
source: https://www.bctengineer.com/q/semester_7/ict_project_management/define-risk
site: BCT Engineering
---

# Risk

ICT Project Management · Chapter 12: Project Risk Management

- Asked in: year not given
- Video: [Risk Management | Process and Approaches | Real-Time Examples | in 14 min](https://www.youtube.com/watch?v=jfaABy0E6r4) — Leaders Talk - ThinkEduca
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/ict_project_management/define-risk
- Whole chapter: https://www.bctengineer.com/md/semester_7/ict_project_management/chapter-12

## Question

What do you mean by risk?

## Short answer

A risk is an uncertain event or condition with a positive or negative effect on project objectives. It has probability and impact; risk exposure equals probability times impact. It differs from an issue (already occurred). Example: 20% chance of server failure causing Rs 5,00,000 loss yields EMV Rs 1,00,000.

## Answer

A **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 (PMBOK). Schwalbe: risk is the possibility of loss or injury; project risk includes both negative (threats) and positive (opportunities) risks.

#### Key points
- **Uncertainty**: it may or may not happen.
- **Cause and effect**: has a cause (condition) and, if it occurs, an impact.
- **Probability and impact**: Risk exposure = probability × impact.
- **Negative risk (threat)** and **positive risk (opportunity)**.
- Risk differs from an **issue**, which has already occurred.

#### Types of risk
| Type | Examples |
|---|---|
| Technical | New technology failure, performance shortfall |
| Management | Poor planning, communication |
| Organisational | Funding cut, priorities change |
| External | Law change, supplier failure, disaster |
| Market | Competitors, demand |
| Financial | Cost overrun, exchange rate |

#### Risk attributes
- Event, probability (0-1 or low/medium/high), impact, timing, and risk owner.

#### Risk exposure example
Probability of server failure 20%, loss Rs 5,00,000.
Expected monetary value = 0.2 × 5,00,000 = Rs 1,00,000.

#### Risk management process
```text
Plan -> Identify -> Qualitative -> Quantitative
     -> Plan responses -> Monitor and control
```

#### Risk tolerance
Different stakeholders have different attitudes: risk-averse, risk-neutral and risk-seeking.

**Example:** In a mobile banking project, a risk is "payment gateway API changes during development", which could delay the schedule by a month.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. How is risk defined in PMBOK?
   A. A certain event that has happened
   B. Only a possible loss
   C. An uncertain event that if it occurs has a positive or negative effect on objectives
   D. Only a schedule delay
   Answer: C. Risk may be positive or negative. (Key point: Definition)

2. How does a risk differ from an issue?
   A. A risk has already occurred
   B. They are identical
   C. An issue is always positive
   D. An issue has already occurred; a risk may or may not
   Answer: D. Issues are current problems. (Key point: Risk vs issue)

3. Probability 20% and loss Rs 5,00,000 gives what expected monetary value?
   A. Rs 1,00,000
   B. Rs 25,00,000
   C. Rs 10,000
   D. Rs 5,00,000
   Answer: A. 0.2 x 5,00,000 = 1,00,000. (Key point: EMV)

## Related in ICT Project Management

- [Project risk](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aproject-risk) — ICT Project Management, chapter 12
- [Risk management plan](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Arisk-management-plan) — ICT Project Management, chapter 12
- [Resolution of risk](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aresolution-of-risk) — ICT Project Management, chapter 12
- [Risk audits](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Arisk-audits) — ICT Project Management, chapter 12

## Related in other subjects

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- [Risk management and its steps](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-management-define-steps) — Project Engineering, chapter 5, asked 2×
- [Safety risk-benefit analysis; dispute resolution](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Asafety-risk-benefit-conflict-resolution) — Engineering Professional Practice, chapter 6
- [Return period for bridge design at 5% risk](https://www.bctengineer.com/question.md?key=semester_5%2Fengineering_hydrology%3Abridge-return-period-5pct-risk) — Engineering Hydrology, chapter 6