PFMP · Question #482
Risk Management is integrated in all the other processes and process groups and is an integral recurrent activity throughout the portfolio life cycle. Which of the following is considered the most eff
The correct answer is A. Tornado Diagram. A Tornado Diagram is a sensitivity analysis tool that visually ranks risks or variables by their relative impact on a portfolio objective. It lists risks from highest to lowest impact (resembling a tornado shape), making it easy to identify which risks pose the greatest threat or
Question
Risk Management is integrated in all the other processes and process groups and is an integral recurrent activity throughout the portfolio life cycle. Which of the following is considered the most effective method for analyzing the effect of risks on portfolio strategic objectives, and determining whether they have high or low effect
Options
- ATornado Diagram
- BRisk vs. Return charts
- CBurn Down/Up charts
How the community answered
(34 responses)- A74% (25)
- B9% (3)
- C18% (6)
Explanation
A Tornado Diagram is a sensitivity analysis tool that visually ranks risks or variables by their relative impact on a portfolio objective. It lists risks from highest to lowest impact (resembling a tornado shape), making it easy to identify which risks pose the greatest threat or opportunity to strategic objectives. Risk vs. Return charts compare reward against exposure but do not isolate individual risk effects on objectives. Burn Down/Up charts track work progress over time and are not risk analysis tools. The Tornado Diagram is the standard PMI-recognized tool for comparing risk sensitivity against strategic outcomes.
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