Exam CAP topic 1 question 20 discussion

Risk utility function is assigned to the low-level of stakeholder tolerance in this project. The risk utility function describes a person’s or organization’s willingness to accept risk. It is synonymous with stakeholder tolerance to risk. Risk utility function facilitates the selection and acceptance of risk and provides opportunity to merge the approach with setting thresholds of risk acceptability and using utility-risk ratios if necessary. Answer: B is incorrect. Risk avoidance is a risk response to avoid negative risk events. Answer: A is incorrect. This is not a valid project management and risk management term. Answer: D is incorrect. Risk-reward describes the balance between accepting risks and the expected reward for the risk event. Risk-reward mentality is not a valid project management term.