PMP Practice: Use methods to support compliance
Question 4 of 6 in Plan and Manage Project Compliance
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Correct answer: Story B ($72,000 expected regulatory exposure)
Explanation
Expected monetary value for risk exposure is calculated by multiplying the probability of the risk occurring by its potential financial impact. This calculation helps prioritize compliance work based on actual financial threat rather than story size or perceived severity. For Story A: 35% × $180,000 = $63,000. For Story B: 60% × $120,000 = $72,000. For Story C: 25% × $200,000 = $50,000. Story B presents the highest expected regulatory exposure at $72,000, making it the priority choice when capacity is limited. This approach ensures compliance decisions are data-driven and aligned with business risk tolerance. The calculation does not factor in story point complexity because expected monetary value measures financial threat independently of implementation effort—effort influences what can be done, but EMV identifies what should be prioritized from a risk perspective.
**Why not B:** This represents the correct EMV calculation for Story A ($63,000), but it is not the highest exposure. Story B's EMV is higher at $72,000, making it the greater regulatory threat if left unaddressed.
**Why not C:** This represents the correct EMV calculation for Story C ($50,000), but it is the lowest exposure among the three stories. Despite Story C having the largest potential fine ($200,000), its low probability (25%) results in lower expected value than Story B.
**Why not D:** This distractor results from incorrectly attempting to weight the EMV by story point complexity (dividing $63,000 by 8 story points then multiplying by some factor, or creating a complexity-adjusted formula). Expected monetary value calculations for compliance risk do not incorporate implementation effort—EMV measures financial threat independently of story size. The team's capacity constraints are a separate consideration from risk quantification.
Key Concept
This question covers Use methods to support compliance under Plan and Manage Project Compliance (Business Environment).
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