Define risk and explain its two key dimensions used in risk assessment.

• A. Risk is the certainty of achieving objectives; the dimensions are scope and cost.
• B. Risk is the probability that an event will affect objectives; the two key dimensions are likelihood and impact.
• C. Risk is the flavor of uncertainty; the dimensions are schedule and quality.
• D. Risk is the amount of budget allocated to uncertainties; the dimensions are risk and reward.

Answer: (B)

Risk is about uncertainty affecting objectives. In risk assessment, the two key dimensions are likelihood and impact. Likelihood measures how probable it is that a specific risk event will occur, while impact measures the magnitude of the effect on objectives if that event happens. By evaluating both, you can gauge how significant a risk is and prioritize responses; some frameworks combine them (often as risk exposure = likelihood × impact) to create a sense of overall risk level. This approach keeps the focus on potential deviations from objectives due to uncertain events.

• The other descriptions don’t fit risk assessment as commonly defined: risk isn’t the certainty of achieving objectives, and the broad “flavor of uncertainty” with unrelated dimensions or budget-centric framing don’t capture how risk is typically measured and prioritized.