Certified Texas Contract Manager Practice Exam

Which risk pertains to the cost or value aspect of a project?

1. Schedule Risk

2. Financial Risk

3. Operational Risk

4. Compliance Risk

The correct answer is: Financial Risk

The correct choice relates directly to the financial aspects of a project, encapsulating the risks associated with budget overruns, funding shortfalls, fluctuating costs, and overall financial stability. Financial risk is integral to project management as it can significantly impact a project's ability to meet its objectives if not carefully monitored and managed. This type of risk considers how expenses might exceed initial estimates or how changes in the economic environment could affect the project's financing. In contrast, schedule risk pertains more to the timeline of the project and the likelihood of delays, which does not directly implicate the financial aspects in the same way. Operational risk involves potential failures in processes or systems that can impede daily operations, while compliance risk relates to the possibility of failing to adhere to regulations and laws governing the project's execution. Each of these risks plays an important role in project management but does not focus specifically on the financial ramifications inherent in budget management and overall project cost.