PfMP Certification Portfolio Risk Management 2

Question 1

Which document formally authorizes a portfolio risk management approach and defines roles, responsibilities, and methodologies?

Accepted Answer

Risk Management Plan

Answer

Risk Register

Answer

Portfolio Charter

Answer

Risk Breakdown Structure

Question 2

When a risk response creates a new risk, the newly created risk is known as a:

Accepted Answer

Secondary risk

Answer

Residual risk

Answer

Trigger risk

Answer

Emerging risk

Question 3

A portfolio manager uses a Risk Breakdown Structure (RBS). What is the main benefit of this tool?

Accepted Answer

It provides a hierarchical framework to categorize and organize portfolio risks

Answer

It calculates the expected monetary value of each risk

Answer

It assigns risk owners to each identified risk

Answer

It quantifies residual risks after responses are implemented

Question 4

Which of the following best describes a 'risk threshold' in portfolio management?

Accepted Answer

The measure of acceptable variation in outcomes above which a risk response is required

Answer

The total budget allocated to risk mitigation activities

Answer

The minimum probability for a risk to be included in the risk register

Answer

The maximum number of risks that can be active at any one time

Question 5

In portfolio risk management, 'risk aggregation' refers to:

Accepted Answer

Combining individual component risks to understand the overall portfolio-level risk exposure

Answer

Adding up the financial costs of all identified risks

Answer

Grouping similar risks into categories for easier tracking

Answer

Assigning multiple risk owners to a single high-impact risk

Question 6

A portfolio manager decides to accept a risk without taking any action because the cost of response exceeds the expected impact. This is an example of which strategy?

Accepted Answer

Passive acceptance

Answer

Active acceptance

Answer

Risk avoidance

Answer

Risk exploitation

Question 7

Which output of the Identify Portfolio Risks process provides a comprehensive list of all identified risks, their characteristics, and potential risk owners?

Accepted Answer

Risk Register

Answer

Risk Management Plan

Answer

Risk Report

Answer

Issue Log