Quick Answer
The answer is the Risk Management Plan and the Risk Budget. The Plan Risk Management process establishes how risk activities will be conducted, and its primary output is the Risk Management Plan, which defines the methodology, roles, and timing for risk management. The Risk Budget is also an output because it allocates contingency reserves based on the agreed risk thresholds, ensuring funds are available for planned risk responses. On the PMP exam, this question tests your understanding that the first risk process produces a governance document and a financial reserve, not the risk register or risk responses. A common trap is confusing the Risk Budget with the overall project budget or assuming the risk register is created here. To remember, think of the two outputs as the “how” (the plan) and the “how much” (the budget).
This PMP practice question tests your understanding of process — managing technical aspects. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
Which TWO of the following are outputs of the 'Plan Risk Management' process?
Risk budget
The risk budget is part of the risk management plan.
Work breakdown structure
Why wrong: The WBS is an output of scope planning.
Risk management plan
This is the primary output of Plan Risk Management.
Probability and impact matrix
Why wrong: This is a tool/technique, not an output.
Risk register
Why wrong: The risk register is an output of Identify Risks.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Risk budget
The 'Plan Risk Management' process is the first step in risk management planning, and its primary output is the Risk Management Plan (Option C). This plan defines how risk management activities will be structured and performed throughout the project. The Risk Budget (Option A) is also an output of this process, as it allocates funds specifically for risk responses, including contingency reserves, based on the agreed risk thresholds and management approach.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Risk budget
Why this is correct
The risk budget is part of the risk management plan.
Related concept
Read the scenario before looking for a memorised answer.
Work breakdown structure
Why it's wrong here
The WBS is an output of scope planning.
Risk management plan
Why this is correct
This is the primary output of Plan Risk Management.
Related concept
Read the scenario before looking for a memorised answer.
Probability and impact matrix
Why it's wrong here
This is a tool/technique, not an output.
Risk register
Why it's wrong here
The risk register is an output of Identify Risks.
Common exam traps
The trap here is that candidates confuse the Probability and Impact Matrix (a tool/technique) with an output, or mistake the Risk Register (an output of Identify Risks) as a product of the planning process, because both are closely associated with risk management activities.
Trap categories for this question
Command / output trap
The WBS is an output of scope planning.
Detailed technical explanation
Under the hood, the Risk Budget is derived from the organization's risk appetite and thresholds, often calculated using expected monetary value (EMV) or Monte Carlo simulations during quantitative analysis, but the budget itself is set during planning to ensure funds are available for future risk responses. The Risk Management Plan includes the methodology, roles, timing, and scoring rules (like the probability and impact matrix), making it the blueprint for all subsequent risk activities. In a real-world scenario, failing to establish a risk budget early can lead to insufficient contingency reserves, causing project delays when risks materialize.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A practitioner preparing for the PMP exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
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FAQ
Process — Managing Technical Aspects — This question tests Process — Managing Technical Aspects — Read the scenario before looking for a memorised answer..
The correct answer is: Risk budget — The 'Plan Risk Management' process is the first step in risk management planning, and its primary output is the Risk Management Plan (Option C). This plan defines how risk management activities will be structured and performed throughout the project. The Risk Budget (Option A) is also an output of this process, as it allocates funds specifically for risk responses, including contingency reserves, based on the agreed risk thresholds and management approach.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
This PMP 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 PMP exam.
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