Question

What is risk? How it is measured? Why risk management is so essential in evaluating a projec​t

Answer 1

Answer:

1.Risk is the chance or probability that a person will be harmed or experience an adverse health effect if exposed to a hazard. It may also apply to situations with property or equipment loss, or harmful effects on the environment.

2.Risk is measured by the amount of volatility, that is, the difference between actual returns and average (expected) returns. ... Returns with a large standard deviation (showing the greatest variance from the average) have higher volatility and are the riskier investments.

3.Proper risk management implies control of possible future events and is proactive rather than reactive. ... Successful project managers recognise that risk management is important, because achieving a project's goals depends on planning, preparation, results and evaluation that contribute to achieving strategic goals.