Discover the correct answer to the PRINCE2 Foundation Exam question about risk budgets in project management. Learn how risk budgets are included in the project budget to fund specific responses to threats and opportunities.
Table of Contents
Question
Identify the missing words in the following sentence. A risk budget is a sum of money included in the [ ? ] and set aside to fund specific management responses to a project’s threats and opportunities.
A. change budget
B. project budget
C. project’s cost tolerance
D. project’s risk tolerance
Answer
B. project budget
Explanation
In PRINCE2, a risk budget is a sum of money included in the project budget and set aside to fund specific management responses to a project’s threats and opportunities. The risk budget is part of the overall project budget, not a separate budget or tolerance.
The risk budget is used to cover the costs of implementing risk responses, such as mitigating threats or exploiting opportunities, that have been identified and planned for during the risk management process. By including a risk budget in the project budget, the project manager ensures that there are sufficient funds available to address risks without impacting the project’s overall budget.
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