According to the PMBOK Guide, specifically within the Perform Qualitative Risk Analysis process, the risk rating (also known as the Risk Score) is determined by the combination of a risk ' s probability of occurrence and its impact on the project objectives if it does occur.
* The Risk Formula: The standard formula used to calculate the risk rating is:
$$\text{Risk Rating} = \text{Probability} \times \text{Impact}$$
* The Calculation:
* Given Risk Rating = $0.56$
* Given Impact = $0.80$ (Very High)
* To find the Probability ($P$):
$$0.56 = P \times 0.80$$
$$P = \frac{0.56}{0.80}$$
$$P = 0.70$$
* Application: This mathematical approach allows project managers to prioritize risks on a numerical scale. In a Probability and Impact Matrix, a risk with a probability of $0.70$ and an impact of $0.80$ would typically fall into the " High Risk " (red) zone, requiring aggressive response strategies and proactive monitoring.
Comparison with other options:
* A. 0.45: This value is incorrect. Multiplying $0.45$ by $0.80$ would result in a risk rating of $0.36$.
* B. 0.56: This is the risk rating itself, not the probability.
* D. 1.36: This value is mathematically incorrect and impossible for a probability. In project management risk scales, probability is always expressed as a value between $0.0$ and $1.0$ (or $0\%$ to $100\%$).
A value of $1.36$ would imply a likelihood greater than $100\%$.