CIPS L5M8 Exam - Topic 1 Question 7 Discussion

Actual exam question for CIPS's L5M8 exam

Question #: 7
Topic #: 1

[All L5M8 Questions]

Bob is the CEO of a fast-growing electronics company. Bob has a high risk appetite and this is reflected within the company culture. Which of the following would be the best approach to manage risk at this company?

Atolerate all risks

Bhire a project manager with a low appetite for risk to balance out the risk appetite

Cset risk thresholds

Dbase the company's competitive strategy on the risk appetite

Show Suggested Answer

Suggested Answer: C

The guide advises defining risk thresholds---acceptable limits of exposure---based on organisational appetite. This ensures balanced risk-taking without being reckless, maintaining strategic alignment.

by Johnna at Nov 25, 2025, 05:30 AM

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Valentine

15 hours ago

Hiring someone with a low risk appetite could help, but is it enough?

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Callie

6 days ago

Option D sounds like a recipe for disaster!

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Taryn

11 days ago

Wait, can a project manager really balance out Bob's risk appetite?

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Sheron

16 days ago

Totally agree, option C makes the most sense.

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Elbert

21 days ago

I think setting risk thresholds is key!

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Doretha

26 days ago

Haha, I love the idea of Bob just being like, "Screw it, let's just embrace the chaos!" But in all seriousness, C) setting risk thresholds is probably the way to go.

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Lorean

1 month ago

A) tolerate all risks? Yikes, that's a bold move, Bob. Might as well just throw caution to the wind and see what happens. What could go wrong, right?

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Merilyn

1 month ago

D) base the company's competitive strategy on the risk appetite? Sounds like a recipe for disaster if you ask me. Might as well just roll the dice and hope for the best.

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Geraldine

1 month ago

I’m a bit confused about tolerating all risks. It seems too reckless, but I guess it could work if the company is really confident in their decisions.

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Kanisha

2 months ago

I practiced a similar question where the focus was on aligning strategy with risk appetite. I think option D could be a strong choice here.

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Justine

2 months ago

I'm a bit confused on this one. I'm not sure if any of these options are the "best" approach. They all seem to have pros and cons. I'd have to think it through more carefully.

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Laquanda

2 months ago

I'm leaning towards D. Basing the company's competitive strategy on the risk appetite could be a really smart way to leverage their culture and stay ahead of the competition.

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Nickole

2 months ago

Definitely C. Establishing clear risk thresholds seems like the most practical way to manage risk in a high-risk company culture. That way, they can still take big swings, but within defined limits.

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Ryan

2 months ago

I'm not entirely sure, but I feel like hiring a project manager with a low risk appetite could create tension in the team. It might not be the best fit for Bob's culture.

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Rickie

2 months ago

I remember discussing how a high risk appetite can lead to both opportunities and pitfalls. I think setting risk thresholds might help manage that.

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Sylvie

3 months ago

B) hiring a project manager with a low risk appetite is an interesting idea, but I'm not sure it would work well with the company culture. Might be a bit of a clash of styles.

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Lauran

3 months ago

C) set risk thresholds seems like the most reasonable approach here. Gotta keep that risk in check, you know?

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Vesta

3 months ago

Hmm, this is a tricky one. I'm not sure if hiring a low-risk project manager is the best idea - that could create a lot of tension in the company culture. Maybe C or D would be better options.

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Buddy

3 months ago

I think setting risk thresholds would be the best approach here. That way, the company can still maintain its high-risk culture, but have some guardrails in place.

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