What is a risk matrix used for?

A risk matrix is a tool utilized to systematically evaluate and prioritize risks by assessing their likelihood of occurrence against the potential impact on project objectives. By plotting risks on a matrix, organizations can visually determine risk levels based on the probability of occurrence and the severity of their effects. This helps in identifying which risks require immediate attention and which can be monitored over time.

The correct answer highlights the primary purpose of a risk matrix, which is to evaluate the relationship between the probability of risk events and their potential consequences. This evaluation informs decision-makers about which risks to mitigate or manage actively.

While project milestones, resource allocation, and scope limitations are important aspects of project management, they do not specifically align with the function of a risk matrix. Project milestones outline key progress points, resource allocation focuses on distributing resources efficiently, and defining project scope limitations pertains to clarifying the boundaries of what the project will deliver. Therefore, those options do not effectively capture the essence of what a risk matrix is designed to do.