Question

• Describe the relationship between cost of risk and chance of risk over the course of project life

Answer 1

In a project, an increase in chance of risk , will create more variation in the expected results, and it will also increase the cost to the project. Hence, cost of managing the risk also increases with increase in the chance of risk. Hence, there is a direct relationship between the cost of risk and chance of risk. Here, chance of risk will have the causal impact upon the cost of risk. With an increasing probability of more risk, cost of risk will increase.