A business analyst (BA) on a project is in the process of validating requirements and finds that there is a high degree of uncertainty related to one of the assumptions being true. The BA adds the assumption to the risk register and performs a full risk analysis to handle this situation. What type of strategy is in place if the organization is risk-averse?
In the given scenario, the business analyst is dealing with an uncertain assumption and has added it to the risk register. The BA also performs a full risk analysis to address the uncertainty. When an organization is risk-averse, it prefers to minimize risks rather than accept them. The correct strategy for minimizing risks and proactively addressing the uncertain assumption is mitigation. Avoidance would mean completely avoiding the risk, which is not implied here since the assumption was added to the risk register and analyzed further. Acceptance and transfer are not suitable as they do not align with taking proactive steps to reduce the risk.
Ans - B - An unwillingness to accept much uncertainty; there may be a preference to either avoid a course of action which carries too high a level of risk, or to invest more to reduce the risk.
B=Avoidance as per the reisk version definition
Avoidance (risk is removed to ensure it doesn't occur) Mitigate (risk is reduced at the min so it doesn't occur) BA performs a full risk analysis, means that the risk is not totally removed. I will go for "mitigate" first.
The magic word here are "to handle this situation". This is the same definition as "reduce the possible negative consequences if the risk does occur" (BABOK 10.38.3.4) Answer C (Mitigation)
There are four primary ways to handle risk in the professional world, no matter the industry, which include: Avoid risk. Reduce or mitigate risk. Transfer risk. Accept risk. Given the level of risk aversion, I believe the answer is Avoidance.
In the scenario, the BA is dealing with an 'uncertain assumption', not a known risk, and also 'handling this situation'. BA adds the assumption to the risk register as a proactive step to analyze and manage it in case it turns into a risk during the project. Therefore, the appropriate strategy at this stage is mitigation 'C' to proactively address the uncertain assumption, rather than avoidance 'B', which would apply to known risks that the organization wants to avoid.
"C" - "full risk analysis to handle this situation" means plan to reduce possible negative consequences. Not to remove the source since it was "added to risk register" nor prevent it from happening as in Avoid.
Mitigation is correct. Risk-averse approach takes actions of avoid, transfer and mitigate risks. Transfer and Avoid are not the case here because BA is in between the project (as mentioned that he/she is validating the requirements and is only uncertain about one assumption) and subsequent action of full risk analysis to handle situation suggests that BA is willing to reduce the negative consequences of risk.