PRINCE2-PRACTITIONER Practices Practice Question
A project introduces a risk where a new software tool might fail to comply with upcoming environmental electronic waste regulations (ESG integration). The Project Manager wants to apply a response that transfers the financial impact of this risk. Which response is best suited?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Transferring the risk by negotiating a strict vendor penalty clause for non-compliance.
Transferring a risk typically involves shifting the financial impact to a third party, such as purchasing insurance or negotiating a warranty/penalty clause with a supplier.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Accepting the risk and doing nothing.
Why it's wrong here
Acceptance leaves the project exposed to the financial impact without transfer.
- ✗
Avoiding the risk by canceling the project entirely.
Why it's wrong here
Avoiding eliminates the threat by stopping the activity, which is overly drastic if transfer is possible.
- ✗
Mitigating the risk by redesigning the software.
Why it's wrong here
Redesigning is a reduction/mitigation response, not a transfer.
- ✓
Transferring the risk by negotiating a strict vendor penalty clause for non-compliance.
Why this is correct
Correct. Transferring risk can involve contractual arrangements such as warranties or penalty clauses with suppliers.
About these practice questions
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed August 2026 · checked against the official AXELOS / PeopleCert exam blueprint
This PRINCE2-PRACTITIONER practice question is part of Courseiva's free AXELOS / PeopleCert certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PRINCE2-PRACTITIONER exam.