What are the two main components of project risk management?

The correct answer identifies the two main components of project risk management as risk identification and risk analysis.

Risk identification is the initial step in the risk management process where potential risks that could affect the project are recognized. This involves brainstorming sessions, expert interviews, and the use of historical data to uncover various events that may pose a threat or opportunity to project objectives.

Following identification, risk analysis is conducted to evaluate and prioritize the identified risks based on their likelihood of occurrence and the potential impact on project outcomes. This analysis can be both qualitative, which assesses risks based on their severity and feasibility, and quantitative, which involves numerical assessment and modeling to predict the implications and necessary responses to the risks.

Together, these two components enable project managers to not only recognize risks but also to understand their potential effects, thereby informing planning and decision-making processes that aim to mitigate risks effectively and enhance project success.