Portfolio Management Professional (PfMP) — Question 25

A new CEO has been hired by an organization, and the board of directors has made it clear that the new CEO must take more business risk than the previous CEO. The portfolio risk tolerances may need to be altered because of the leadership change.
How should the portfolio manager respond?

Answer options

• A. Update the portfolio roadmap.
• B. Create what-if scenarios.
• C. Update the portfolio risk register.
• D. Interview the portfolio’s stakeholders.

Correct answer: C

Explanation

The correct answer is C, as updating the portfolio risk register is essential to reflect the new risk tolerances required by the new CEO's approach. Options A and B, while valuable, do not directly address the need for an updated risk register, and D, although useful for gathering input, does not ensure that the risk parameters are formally updated.