An organization establishes a new portfolio to initiate a new division. A new management team from a wide variety of competitors is hired. The portfolio manager reviews the potential portfolio risks w

Question

Options

• APerform and review the risk prioritization.
• BPerform and review a Monte Carlo simulation.
• CDevelop and review the risk register.
• DDevelop and review a risk probability and impact matrix.

• A
  5% (2)
• B
  13% (5)
• C
  79% (31)
• D
  3% (1)

Explanation

When team members from diverse backgrounds hold widely varying views of portfolio risks, developing and reviewing the risk register is the best approach to build a shared, common understanding. The risk register is a collaborative, structured document that captures all identified risks, their descriptions, owners, and assessments in one place, giving everyone a unified reference. Risk prioritization (A) and probability/impact matrix (D) are downstream analysis steps that assume risks are already commonly understood. A Monte Carlo simulation (B) is a quantitative technique for analyzing known risks, not for establishing a shared vocabulary among a diverse team.

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