PFMP · Question #162
The primary objective of portfolio risk management is to:
The correct answer is D. align to the organization's risk tolerance.. Portfolio risk management operates at a strategic level. Its primary goal is not to eliminate or minimize risk - doing so could mean forgoing high-value opportunities - but rather to ensure the portfolio's aggregate risk exposure stays within the boundaries the organization is wi
Question
The primary objective of portfolio risk management is to:
Options
- Aminimize the risk of the overall portfolio.
- Baggregate all of the individual component risks.
- Creduce the risk in each component.
- Dalign to the organization's risk tolerance.
How the community answered
(26 responses)- A4% (1)
- B4% (1)
- D92% (24)
Explanation
Portfolio risk management operates at a strategic level. Its primary goal is not to eliminate or minimize risk - doing so could mean forgoing high-value opportunities - but rather to ensure the portfolio's aggregate risk exposure stays within the boundaries the organization is willing and able to accept. Minimizing risk (A) is overly conservative and strategically limiting. Aggregating component risks (B) is an activity, not an objective. Reducing risk in each component (C) is a project/program-level concern, not the primary portfolio-level objective.
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