Which statement about multi-level portfolios is true?

Question

Options

• AThere should be clearly defined rules for delegation
• BInvestment decisions are only reviewed at corporate level
• CManagement of sub-portfolios is independent of the portfolio governance body
• DAll current and planned change initiatives must be included in one of the sub-portfolios

• A
  2% (1)
• C
  2% (1)
• D
  95% (41)

Explanation

In a multi-level portfolio structure, all current and planned change initiatives must be captured within one of the sub-portfolios - this ensures complete visibility, alignment with strategic objectives, and prevents initiatives from operating outside governance oversight. Option A is a distractor because while delegation rules are good practice, they are not the defining truth about multi-level portfolios - governance structures exist at each level, not just through delegation rules. Option B is wrong because investment decisions are reviewed at multiple levels, not solely at corporate level; sub-portfolio managers have oversight responsibilities within their domain. Option C is incorrect because sub-portfolios are not independent - they operate within and are accountable to the overarching portfolio governance body.

Memory tip: Think of a multi-level portfolio like a filing cabinet - every document (initiative) must be in some drawer (sub-portfolio), and no loose papers are allowed floating outside the cabinet (governance scope).

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