Question

a company is conducting a risk analysis on a project. one task has a risk probability estimated to be 0.15. the task has a budget of $35000. if the risk occurs, it will cost $6000 to correct the problem caused by the risk event. what is the expected monetary value of the risk event?

Answer 1

$ 900

Step-by-step explanation:

given,

a company is conducting a risk analysis on a project.

risk probability estimated (P) = 0.15

Budget of the task is = $35000

cost to correct the problem if risk occur = $6000.

Estimated monetary value is the product of the probability of the risk event and the risk event monetary value.

Estimated monetary value = 0.15 × $ 6000

= $ 900

hence, the expected monetary value of the risk even is $900.