Explanation
Risk management is the process of identifying, analyzing, responding, and monitoring the risks that may affect the project or the organization. Risk management helps to minimize the negative impacts and maximize the positive opportunities of the uncertainties and assumptions. Risk management involves setting the risk tolerance, which is the level of risk exposure that the organization is willing to accept. Risk management also involves identifying the potential risks, which are the factors that may jeopardize the project or the organization's objectives. Risk management also involves prioritizing the tolerance for risk, which is the order of importance of the risks based on their probability and impact. Risk management is an iterative and continuous process that should be performed throughout the project life cycle and at different levels of the organization. References: [IIBA BABOK Guide v3], section 11.1, page 384; CBAP / CCBA Certified Business Analysis Study Guide, chapter 5, page 227; CBAP Sample Questions, question 232.