A key portfolio stakeholder asks a portfolio manager to provide funding for a new initiative. What should the portfolio manager do next?

Question

Options

• AConduct a risk assessment.
• BRebalance the portfolio.
• CEvaluate the proposal.
• DObtain sponsor approval.

• A
  16% (10)
• B
  8% (5)
• C
  73% (47)
• D
  3% (2)

Explanation

Before any funding decision, approval process, or portfolio adjustment can occur, the portfolio manager must first evaluate the proposal. Evaluation examines strategic alignment, cost-benefit, risk, feasibility, and fit within the existing portfolio - the information needed to make any informed decision. A risk assessment (A) is one component of evaluation, not a standalone first step. Rebalancing the portfolio (B) is premature until the proposal's merit is established through evaluation. Obtaining sponsor approval (D) comes after the portfolio manager has assessed the proposal and determined it warrants advancement. Evaluating the proposal is the foundational first step that all subsequent actions depend on.

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