CAPM Predictive Plan-Based Methodologies Practice Question
A project manager is evaluating the impact of a potential risk on project objectives. The risk has a probability of 0.3 and an impact of $50,000. What is the expected monetary value (EMV) of this risk?
⚠ Common exam trap
CAPM often tests the confusion between impact and EMV, where candidates mistakenly select the impact value ($50,000) instead of multiplying by probability, or misplace the decimal when converting the probability (0.3) to a percentage.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
$15,000
The expected monetary value (EMV) of a risk is calculated by multiplying the probability of the risk occurring by its potential impact. In this case, the probability is 0.3 and the impact is $50,000, so EMV = 0.3 × $50,000 = $15,000. This quantifies the average expected loss or gain from the risk, which is used in decision-making and contingency reserve planning.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
$15,000
Why this is correct
EMV multiplies probability by monetary impact, so 0.3 × $50,000 yields $15,000. This quantifies the risk's expected cost exposure against project objectives, giving the project manager a comparable figure for contingency reserves and risk prioritisation within the risk register.
- ✗
$50,000
Why it's wrong here
This restates the impact alone, ignoring the 0.3 probability entirely; EMV requires multiplying the two values to give $15,000. It is tempting because impact is the headline risk figure, but EMV weights it by likelihood, so an unweighted impact is not the expected monetary value.
- ✗
$150,000
Why it's wrong here
Multiplying probability by impact gives $15,000, not $150,000; this option appears to divide impact by probability, an operation EMV never uses. It is tempting because dividing figures feels like a valid risk calculation, yet EMV is strictly probability times monetary impact.
- ✗
$1,500
Why it's wrong here
Multiplying 0.3 by $50,000 yields $15,000, not $1,500; this option misplaces the decimal point. It is tempting because it still multiplies probability by impact, the correct EMV formula, but the arithmetic is wrong by a factor of ten.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official PMI exam blueprint
This CAPM practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAPM exam.