A component manager asks to include a contingency reserve in the budget for some common risks that are valid across several other components in the portfolio. Including this reserve will reduce the co

Question

Options

• Aexclude the component contingency reserve.
• Binclude the contingency reserve in the component's budget.
• Cseek the executive sponsor's approval for the required contingency reserve.
• Dreview the component scope to eliminate the risk.

• A
  14% (8)
• B
  25% (15)
• C
  56% (33)
• D
  5% (3)

Explanation

Because the risks are common across multiple portfolio components, this is a portfolio-level concern rather than a single-component issue. The appropriate course of action is to escalate to the executive sponsor for approval, since the sponsor has the authority to grant exceptions to ROI standards and can consider the reserve at the portfolio level - potentially funding it from a centralized portfolio contingency reserve rather than burdening a single component. Excluding the reserve (A) ignores real risks that affect multiple components. Including it without approval (B) violates acceptable ROI standards without authorization. Eliminating risk by reducing scope (D) is not feasible for risks that are inherently common across the portfolio and may not be within the component manager's control.

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