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PRINCE2F PRINCE2 Practices Practice Question

Which risk response is appropriate for a threat that the project decides to mitigate by outsourcing?

⚠ Common exam trap

PRINCE2F often tests the confusion between 'transfer' and 'reduce' — candidates see 'outsourcing' and think it reduces risk, but the defining characteristic of transfer is shifting ownership/consequence to a third party, not lowering probability or impact.

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

✓

Transfer

Transfer is the correct response because outsourcing shifts the ownership and financial/operational impact of the threat to a third party (e.g., a vendor, insurer, or outsourced provider). In PRINCE2 risk management, 'transfer' does not eliminate the threat — it moves the consequence to another party, typically via contract, insurance, or outsourcing agreement. This matches the scenario where the project decides to outsource the risky work.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✗

    Reduce

    Why it's wrong here

    Outsourcing transfers the threat's ownership and impact to a third party, which is the Transfer response, not Reduce. It tempts because mitigation sounds like lowering probability or impact, but Reduce covers internal countermeasures; Transfer applies when another party bears the risk.

  • ✗

    Avoid

    Why it's wrong here

    Avoiding eliminates the threat by removing its cause, so outsourcing merely transfers it to a supplier under a different response. It tempts because avoidance suits threats with no tolerable exposure, where the activity is dropped or scope changed entirely.

  • ✗

    Accept

    Why it's wrong here

    Accepting means acknowledging the threat without action, whereas outsourcing actively shifts the risk to a supplier under a contractual arrangement. It tempts because outsourcing can feel like passive tolerance, but Accept is correct only when no response is justified and the risk is retained.

  • ✓

    Transfer

    Why this is correct

    Transfer shifts the financial impact and ownership of a threat to a third party, typically through outsourcing, insurance or contracts. Outsourcing the work means the supplier bears the risk, satisfying the stem's requirement for a response that mitigates a threat by moving it elsewhere.

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Same concept, more angles

1 more way this is tested on PRINCE2F

These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.

Variation 1. Which risk response is appropriate for a threat that can be mitigated by transferring the financial impact to a third party?

medium
  • A.Avoid
  • B.Reduce
  • ✓ C.Transfer
  • D.Accept

Why C: Transfer is the PRINCE2 risk response that shifts the financial impact of a threat to a third party — typically via insurance, outsourcing, warranties, or contractual penalties. The threat still exists and may still occur, but the monetary consequence is borne by someone else, which is exactly what the question describes.

JA

Written and reviewed by Johnson Ajibi, MSc IT Security

Senior Network & Security Engineer · founder of Courseiva

Last reviewed September 2026 · checked against the official PeopleCert exam blueprint

This PRINCE2F practice question is part of Courseiva's free 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 PRINCE2F exam.