PRINCE2 Foundation — Question 89

How should a risk budget be applied?

Answer options

• A. It is used to fund all aspects of risk assessment and planning
• B. It is used to cover the costs of implementing any contingent plans
• C. It is used to supplement cost tolerance by funding risk activities
• D. It is an explicit budget held outside of the overall project budget

Correct answer: B

Explanation

The correct answer is B because a risk budget specifically provides funding for the costs associated with implementing contingency plans that arise from identified risks. Options A and C suggest broader uses of the risk budget that are not its primary purpose, while option D implies that it is entirely separate from the project budget, which is not the key function of a risk budget.