PFMP · Question #708
You are the CIO of a real estate investment trust (REIT) that invests in apartments and condominiums in more than 50% of the states in your country. Your organization has as its goal to respond to…
The correct answer is B. Identifying and managing liabilities. As a CIO and executive team member on the Portfolio Review Board, the strategic focus for portfolio risk management is identifying and managing liabilities. In a REIT context with 24/7 operational commitments (Wi-Fi, soft phone service), liabilities represent the financial…
Question
You are the CIO of a real estate investment trust (REIT) that invests in apartments and condominiums in more than 50% of the states in your country. Your organization has as its goal to respond to any concerns that arise within 24 hours; for example, you want to make sure Wi-Fi sites are operational if there are any power outages, and people have soft phone service available 24/7. You are a member of the REIT's Portfolio Review Board, and as a member of the executive team in terms of portfolio risk management, you want to focus on:
Options
- AIssues with product support
- BIdentifying and managing liabilities
- CInteraction of component risks
- DInconsistent processes
How the community answered
(50 responses)- A4% (2)
- B74% (37)
- C8% (4)
- D14% (7)
Explanation
As a CIO and executive team member on the Portfolio Review Board, the strategic focus for portfolio risk management is identifying and managing liabilities. In a REIT context with 24/7 operational commitments (Wi-Fi, soft phone service), liabilities represent the financial, legal, and operational exposures that could result from failing to meet those commitments. At the executive portfolio level, risk management is concerned with organizational-level liabilities and exposures - not just individual component risks. Options A and D (product support issues and inconsistent processes) are operational concerns, and Option C (interaction of component risks) is a valid portfolio risk concept but is more tactical than the broad liability-management focus appropriate for an executive stakeholder.
Community Discussion
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