Most decisions have multiple options that interact in different ways; to maximize the return from the decision it can help to analyze the different ways that those options interact and the possibility of each option actually happening. A risk assesment matrix helps define not only what the various options are but also presents the likelihood of each actually occurring. With each of the options and its probability happening, a person can then make a more informed decision.
Just as importantly, the person can look at risk versus reward and determine if a risk is worth taking. Sometimes a risk is well worth taking based on the risk/reward ratio, even though there may be potential hazards to be aware of. In essence, the matrix shows what the options are, the risks associated with each option, and the possibility of each option, making it well worth creating for better decision making.
