What is risk exposure?

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I was reading an article on project risk management and I read something about "risk exposure". The article stated that risk exposure is one the most important metrics for assessing risks. Please explain what risk exposure is and what it means to risk assessment. Also, since it's a metric, then this means that  it's a number that can be calculated. So how do you calculate risk exposure?

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Risk exposure is the same thing as Risk score, so it is calculated this way:

RE = RP + RI - (RP x RI)

Where:
RE = Risk Exposure
RP = Risk Probability (which is a number from 0 to 1, 0 means that the risk has no probability of occurring and 1 means that the risk will definitely occur)
RI  = Risk Impact (which is the impact of the risk, also from 0 to 1, 0 means that the risk has no impact on th e project whatsoever and 1 means that the risk has the highest impact on the project).

For example, if a risk has a 50% probability of occurring and has an impact of 0.3 over the project, then the Risk Exposure will be:

RE = 0.5 + 0.3 - 0.5 x 0.3 = 0.65

Note that RE also ranges between 0 and 1. 0 means that the risk is not critical at all and does not need to be managed, while 1 means that the risk is very critical.

You can read more about Risk Exposure (or Risk Score) here: http://www.projectmanagementquestions.com/2115/quantitative-risk-vs-qualitative-risk#2157
answered 7 years ago by (46,940 points)
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There is a process known as exposure assessment for those involved in the management of public health: http://en.wikipedia.org/wiki/Exposure_assessment .

More generally, risk exposure can be simply computed by taking the outputs of a general project risk assessment (probability and impact) and multiplying them together.  If impact is measured in dollars, this will give you an estimate of what is at risk.
answered 7 years ago by (45,840 points) edited 7 years ago by MaplePM

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