Practice Test 1 ◾ 129
61. Assume you have been asked to prepare the portfolio management plan as
you are on the staff of your company’s Chief Portfolio Ofcer. In this plan, you
will describe the different methods or approaches that your company will use
to manage different types of components in the portfolio as specied in the:
a. Strategic plan
b. Governance model
c. Roadmap
d. Charter
62. Your goal as a portfolio manager is to develop a strong communications
management plan to keep interested stakeholders informed about your prog-
ress in portfolio management. Although you have reached out to numerous
stakeholders, you know other portfolio processes also can help in this pro-
cess such as:
a. Strategy
b. Finance
c. Governance
d. Performance
63. Working to ensure the portfolio management process is one that is followed
and is embraced has been a major challenge. As the portfolio manager,
assume you set up meetings with the Portfolio Governance Group bi- weekly
since there is constant change in your telecom company. You also want the
portfolio process to be transparent. To do so, a useful tool to communicate
status is:
a. Reports on funding decisions
b. A governance decision register
c. The portfolio roadmap
d. Key portfolio milestones
130 ◾ PfMP® Exam Practice Tests and Study Guide
64. Assume you recently were hired to be the rst portfolio manager at the
leading producer of soft drink beverages. While the company is well known
for one product, it wants to be the leader in other products and services as
well. When you were hired, you told the CEO it would take time to fully
implement portfolio management, and you rst would prepare a number of
artifacts. He set up a Portfolio Review Board, and its members are review-
ing your work. As they reviewed the portfolio management plan, one of the
members suggested you prepare an in- depth portfolio performance plan.
Your rst step is to:
a. Align strategic management to the goals and objectives
b. Review the prioritization model
c. Assess the risk prole
d. Review portfolio goals
65. You are the portfolio manager for your military- vehicle service rm, which
has been in existence for 20years. You have a number of components
under way, and others in the pipeline. One component involves a new gas
detection system, which uses new technology. It has interfaces with two
other existing components plus one in development. Recently, a simulator,
used by three components, had to be shut down completely as it was leak-
ing nitrogen and could lead to asphyxiation. You reported it immediately
to the Hazardous Materials and Pipeline Safety Administration. This is an
example of a:
a. Execution risk
b. Structural risk
c. Critical incident
d. Known unknown
Practice Test 1 ◾ 131
66. Having worked in portfolio management before, you are pleased you were
selected to implement it and be the portfolio manager for your motorcycle
company, well known throughout the world. As it is a new function, you
worked with the Enterprise Program Management Ofce to ensure you had
a complete inventory of the work in progress. Now as you prepared your
various portfolio management artifacts, and have a Portfolio Review Board
meeting upcoming in two weeks, sponsors will be proposing new compo-
nents. This means:
a. A master schedule of resource allocation is needed
b. The meeting also should focus on reviewing existing components to see
if they are aligned with current strategy
c. People throughout the organization should know about this meeting and
its decisions
d. The meeting should have a set agenda, and each member should be con-
tacted before it to learn of key issues
67. Assume you are working in the Joint Forces Command in your country. In
this agency, all of the defense agencies are consolidated for better collabora-
tion to support troops working around the world. Each program or project
tends to have more than one sponsor, and since each Command is repre-
sented in this agency, the same is true for the portfolio. These key and major
stakeholders are listed in the:
a. Governance plan
b. Portfolio charter
c. Portfolio performance plan
d. Portfolio Review Board charter
68. Your health insurance company has set up its portfolio into ve different cat-
egories: research and development, IT, Medicare, government health insurance,
and non- government health insurance. Funding is allocated yearly to each of
these six categories. As the portfolio manager at the enterprise level, you:
a. Ensure such allocations are reected in the portfolio’s strategic plan
b. Meet with the CFO and determine these allocations when the budget for
the scal year is being prepared
c. Meet with the managers of the ve portfolios once the budget allocations
are known
d. Use your existing inventory of components in the portfolio and in the
pipeline to determine funding allocations
132 ◾ PfMP® Exam Practice Tests and Study Guide
69. As the Director of the Portfolio Management Ofce at your worldwide furni-
ture store, you prepare a series of reports on the status of the portfolio. One
report that you use is a bubble diagram. In using it in terms of resource sup-
ply and demand, you should structure it to show:
a. Required resources and available resources
b. Resource availability and life cycle phase
c. Resource competency and component probability of success
d. Resource importance and probability of success
70. Your organization is considered a leader in knowledge management and has
a Chief Knowledge Ofcer reporting to the CEO. It also implemented portfo-
lio management eight years ago. As the organization focuses on continuous
improvement and transformational leader ship, it had an external consultant
review its portfolio artifacts and do some benchmarking. One of the consul-
tant’s recommendations was to update the portfolio risk management plan
since the company is embracing new and complex technology in much of its
work. In updating this plan, it was useful to:
a. Review lessons learned
b. Determine relevant condence limits of risk metrics
c. Prioritize how risks are identied and listed in the risk register
d. Determine the time in which risks are likely to have the greatest impact
71. Working to manage portfolio value is a continuous task. In doing so, as the
portfolio manager, you review the monthly and any ad hoc reports submit-
ted by component managers. This month you saw there was an excellent
opportunity for major cost savings in two components in the top ve on
the portfolio list; however, to realize this cost reduction, these components
require resources to be reallocated from other components in progress for
six months. These forecasts then:
a. Should be veried by independent estimators for accuracy
b. Require validation by the CFO and his staff
c. Should be accompanied by an analysis of earned value data to ensure the
components are using the same method of reporting
d. Are recommended for consideration by the Portfolio Review Board
72. As vision is the desired end state, it requires specic strategies to attain it.
These strategies are best achieved by establishing:
a. Outcomes
b. Key performance indicators
c. Critical success factors
d. Goals
Practice Test 1 ◾ 133
73. Assume it was your suggestion to the executive team as the newly appointed
Chief Financial Ofcer for your organization to implement portfolio manage-
ment. While someone has been identied to be the portfolio manager, you
are developing the charter and the structure. In doing so, guidance is pro-
vided by the:
a. Portfolio strategic plan
b. Organization’s strategic plan
c. Portfolio roadmap
d. Plans, policies, and documentation of stakeholder expectations
74. With the increasing use of drywall, your company, which has been in the
plaster business for over three generations, is nding it harder to maintain
a share of the market and to achieve a positive return on its investments.
Three years ago, the corporate executives implemented a portfolio process,
and they serve as the Portfolio Governance Council. They meet monthly, and
after each meeting, you prepare a report of their decisions. This report is:
a. Sent to all employees in the company as it focuses on employee empow-
erment and involvement
b. Distributed only to the Governance Council to serve as a record of their
meetings
c. Is used to authorize the portfolio
d. Is used to analyze the effects of their decisions on the company’s portfolio
75. Assume you are working to ensure your organization has a balanced port-
folio. You have decided to use a bubble diagram and have set it up to show
the components in terms of: ease of execution [difcult or easy] and compo-
nent importance [high or low]. In such an approach, bubbles are used to:
a. Visualize components
b. Frame the balancing problem
c. Provide scores as outputs
d. Focus on existing components
76. One of your goals as a portfolio manager is to ensure that your stakehold-
ers receive the information they need for decision making. To help manage
the portfolio information that is provided, you decide to gather information
by holding portfolio component review meetings. Your purpose in holding
these meetings is to:
a. Ensure the components can provide the data required for status reports
b. Use them to introduce the portfolio management information system
c. Validate data that now are in the reports
d. Work with component managers to plan dashboard reports
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