What is the best risk decision for the project if the risk is at 10% and the threshold is 20%?

• A. Mitigate the risk.
• B. Accept the risk.
• C. Avoid the risk.
• D. Transfer the risk.

Answer: (B)

In risk management, you compare the current risk level to a defined tolerance or threshold to decide if action is needed. When the risk level is within the acceptable range, the prudent move is to accept it and monitor for any change, rather than spending resources to reduce it.

Here, the risk is 10% and the threshold is 20%, so the risk sits below the tolerance. That means no additional risk treatment is warranted because the potential impact is considered acceptable within the project’s risk appetite. Taking action to mitigate, transfer, or avoid would not be justified unless the risk rose above the threshold or the cost of intervention outweighed the benefit.