Certified Management Accountant Practice Exam 2025 - Free CMA Practice Questions and Study Guide

Qualitative risk assessment primarily involves the subjective determination of potential impacts on a project. This process is centered on evaluating risks not through numerical data but rather by considering the nature, characteristics, and potential effects of each risk on project objectives. It relies heavily on expert judgment, team insights, and stakeholder input to understand risks in a more holistic and context-sensitive manner.

This approach allows project managers and stakeholders to prioritize risks based on their severity and likelihood of occurrence, facilitating targeted responses to mitigate the most significant threats. In qualitative assessments, aspects such as stakeholder opinions, historical data, or scenarios may be used to inform decisions and actions related to risk. This differs from quantitative risk assessments, which rely on mathematical models and statistical analysis to calculate potential impacts based on numerical data.

The other options each reflect different methodologies or processes that do not align with the qualitative nature of this assessment. Instead of focusing on data-driven metrics or statistical measures, qualitative risk assessment is rooted in subjective analysis and understanding of risk impacts, making it a critical component of risk management.