PRINCE2F PRINCE2 Practices Practice Question
Which TWO of the following are purposes of the Risk Management practice?
⚠ Common exam trap
A common mix-up: candidates confuse the purpose of risk management with extreme or absolute goals (like avoiding all risks or removing uncertainty), when PRINCE2 emphasizes balanced, proactive management of uncertainty to support decision-making.
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
✓
To identify and manage risks proactively
Option A is correct because the Risk Management practice is fundamentally about identifying risks proactively and managing them before they materialize or escalate, rather than reacting after the fact. Option E is correct because Risk Management provides visibility into risk exposure, which directly supports informed decision-making about priorities, investments, and controls. The practice does not aim to avoid all risks (B), since some risks must be accepted to achieve objectives, nor does it require transferring all risks to a third party (C), as transfer is only one of several risk response options. It also cannot remove uncertainty from a project (D), because uncertainty is inherent; the practice instead helps understand and manage it.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
To identify and manage risks proactively
Why this is correct
Risk Management proactively identifies threats and opportunities, assesses them and plans responses before they materialise, embedding risk thinking into all PRINCE2 processes. This satisfies the stem's requirement for proactive identification and management rather than reactive firefighting after issues occur.
- ✗
To avoid all risks
Why it's wrong here
Avoiding all risks is impossible; the practice exists to identify, assess and control threats so objectives can still be met within tolerances. Avoidance is merely one response when a threat outweighs the benefit, not the purpose, which is to manage and exploit uncertainty deliberately.
- ✗
To ensure all risks are transferred to a third party
Why it's wrong here
Risk management identifies, assesses and responds to threats, accepting that some exposure remains; transferring every risk to a third party is neither possible nor its purpose. Transfer is one response option where insurance or contracts genuinely fit, but residual risk always stays with the project.
- ✗
To remove uncertainty from the project
Why it's wrong here
Uncertainty cannot be removed from a project; risk management seeks to understand and respond to it so objectives remain achievable. Reducing uncertainty is a benefit, but the purpose is to identify, assess and control threats and opportunities, accepting that some uncertainty always persists.
- ✓
To support decision-making by understanding risk exposure
Why this is correct
Risk Management quantifies probability and impact to expose aggregate risk exposure, enabling informed decisions about whether to proceed, escalate or adjust tolerances. This satisfies the stem's requirement that risk information supports decision-making, complementing the practice's proactive identification purpose.
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