8 Portfolio Risk Management

Question 1

primary objective of portfolio risk management

Answer 1

to ensure that portfolio components will achieve the best possible success through balancing of risks (opportunities & threats)

Question 2

objective of the portfolio risk management framework

Answer 2

enables portfolio managers to allocate current capital and resources within the capacity constraints of the organisation to obtain future benefits

Question 3

difference between riskmanagement at portfolio level vs. risk management at project level

Answer 3

at portfolio level, risk elements are balanced and not necessarily maximized or minimized against various parameters. In project and program risk management, a simple decomposition approach to risk management is appropiate

Question 4

central principles to risk management (3)

Answer 4

• maximize portfolio value while balancing risks
• foster a culture that embraces change and risks
• navigate complexity to enable successful outcomes

Question 5

factors with an impact on the selection or termination of portfolio components (3)

Answer 5

tradeoffs between

• threats and opportunities
• short- and long term impacts
• environmental considerations

Question 6

key elements in portfolio risk management (4)

Answer 6

• risk management planning
• risk identification
• risk analysis
• risk response

Question 7

def portfolio risk management plan

Answer 7

describes how risks will be managed within the portfolio. Does not contain risk analysis, but provides the structure for risk- related data management

Question 8

def portfolio risk management framework

Answer 8

outline that links organisational risk management processes within the portfolio; supports the overarching priciples of risk management