154 ◾ PfMP® Exam Practice Tests and Study Guide
141. As you are the portfolio manager for your state government agency, which is
undergoing a series of budget cuts, you are focusing attention on managing
risks to the portfolio as the budget is reduced. You realize in this process
the time and budget for risk management also will be reduced; these data
are in the:
a. Portfolio performance plan
b. Portfolio strategic plan
c. Portfolio management plan
d. Portfolio nancial plan
142. As the portfolio manager you have worked to consider the complexities
involved of the interdependencies in your programs, projects, and ongoing
work. As your portfolio process has been implemented for three years, a
key challenge is that senior executives tend to change priorities often even
though programs and projects are being implemented. Often these programs
and projects are cross- functional, and the result is your process is not coor-
dinated. You recognize there is a need to change, and you met with the
Chair of the Portfolio Review Board and have her support for a transparent
approach for portfolio standards and prioritization. You should:
a. Revise the balancing process
b. Revise the portfolio management plan
c. Revise the scoring model
d. Set up a standard method to communicate change
143. Assume your telecom company is time constrained and needs to be rst to
market with new smart phones with features that are different from those of
the competition and also have the traditional features desired by your exist-
ing customers. The Portfolio Review Board meets weekly to assess perfor-
mance and to consider new components. Lack of technical resources is a
recurring issue. To make the case for acquiring new resources, you decided
to assess capability and capacity. This approach is:
a. Part of the PMIS
b. Included in nite capacity planning and reporting
c. Used to prepare a detailed forecast of ongoing and future capability
needs
d. Used to identify resource capacity and capability
Practice Test 1 ◾ 155
144. Since you work for a global aerospace and defense organization, it decided
to pilot the implementation of portfolio management in its cargo aviation
business unit. You were asked to lead this initiative and realized before you
could proceed, you should nd out information about all the existing proj-
ects, programs, and operational activities. This task took three months to
complete, but with this list, you now can use it to set up categories for the
work that is under way and to also dene criteria to use to propose new
components. As a result you should:
a. Determine how to optimize the existing work
b. Ensure the criteria and categories are aligned with the portfolio roadmap
c. Set up a Portfolio Review Board
d. Prepare a portfolio performance plan
145. You prepared a portfolio risk management plan when you replaced the
previous portfolio manager three years ago. However, recent structural and
execution risks have affected the portfolio adversely, resulting in lost oppor-
tunities and a decrease in overall return on investment. You are updating the
risk management plan as now stakeholders can see its value. In doing so,
you can use some portfolio process assets such as:
a. Lessons learned
b. Portfolio algorithms
c. Vision statements
d. Risk categories
146. You are working diligently to ensure people throughout the organization
realize the importance of portfolio management. To do so, you are prepar-
ing a communications strategy. When you distribute it, you will be able to
show you can satisfy information requirements in order to:
a. Show the data you plan to collect will be analyzed
b. Provide credibility for a portfolio management process
c. Meet the organization’s objectives
d. Push information to stakeholders on portfolio status
147. After three months, you have a list of all the program, project, and ongo-
ing work being done in your 500-person Division of your State Government
Agency. With this list, the next step is to:
a. Determine the prioritization model to follow
b. Convene a meeting of the Portfolio Review Board
c. Assess gaps in meeting the Agency’s strategic objectives
d. Prepare a portfolio performance plan
156 ◾ PfMP® Exam Practice Tests and Study Guide
148. Even though you do not work in an industry that is heavily regulated by
your government, such as in new product development, health, or safety,
recently your government issued a mandate that senior management of all
corporations must certify the accuracy of reported nancial statements to
prevent any accounting fraud. These controls are to be implemented in the
next scal year. This obviously is not in your portfolio strategic or manage-
ment plans but is an example of a(n):
a. Mandated component
b. Enterprise environmental factor
c. Strategic change
d. Emergent program
149. As soon as you complete the portfolio risk management plan, and you have
been working on it now with a team, you realize you need to update some
organizational process assets such as:
a. Risk checklists
b. Risk register
c. Lessons learned
d. Risk interview guide
150. Consider the following situation:
Project/ Program Cost IRR Risk Type
Program A $30 million 21% 0 Operational improvement
Program B $30 million 22% 1 Operational improvement
Program C $30 million 26% 2 Capital expansion
Project D $30 million 24% 1 New product
Project E $30 million 22% 2 New product
Project F $30 million 28% 3 New strategy
Assume you have been asked to perform a prioritization analysis based on
these data. You realize risk is a major concern to the company, but you have
some data available about potential benets. These data show A and D have
the greatest benets. A and D are followed in terms of benets by C, then B,
then F, and nally E. Assume three of the programs and projects can be added
to the portfolio when the Board meets. Your recommendation is to select:
a. A, B, and C
b. A, D, and C
c. A, F, and C
d. D, B, and C
Practice Test 1 ◾ 157
151. Assuming a portfolio manager position means one has more stakeholders
than in program, project, or operational roles. The goal is to identify all
interested stakeholders but often overlooked are:
a. Consumer groups
b. Alliances
c. Associations
d. External resource providers
152. Assume after the acquisition of the natural gas transmission company by
your company, a natural gas distribution company, was approved by the
various regulatory agencies. You now are overseeing more components with
this acquisition as the portfolio manager. While you had each of the compo-
nents in your company set up in various categories, this approach had not
been followed by the transmission company. You explained to its portfolio
manager and staff such an approach enables:
a. Common criteria for portfolio optimization
b. A similar approach to track contribution to strategic goals
c. A way to set up a common set of decision lters
d. An alignment with the prioritization model
153. Working previously in the nancial industry and studying nance and risk in
graduate school, you are familiar with Markowitz’s Efcient Frontier theory.
Now assume you are the portfolio manager for a state government agency.
Your agency has a reputation of being risk adverse but given recent budget
cuts, you have convinced your executive team it needs to pursue some new
programs and projects to demonstrate its benets to the state. You decided
to apply the Efcient Frontier concepts to show them the current state of its
components in terms of risk and associated costs. You explained the portfo-
lio is efcient if it has:
a. A mix of components—from high risk/ high return to low risk/ low return
b. The ability to quantify the value of risk in monetary terms
c. The possible overall portfolio value with the greatest possible benets
d. The best possible expected level of return for its level of risk
158 ◾ PfMP® Exam Practice Tests and Study Guide
154. Your organization has a dened portfolio management process that it has
followed for three years. As the portfolio manager, you keep your various
plans up to date, and because of numerous regulatory changes involving
the telecom industry, it is time to review and update the risk management
plan. You have several key stakeholders working with you as you realize the
importance of this plan in maintaining a competitive advantage. One way
you and your team are assessing the various risks that may impact the struc-
ture of the portfolio is to use:
a. Portfolio component charts
b. Portfolio reports
c. Weighted ranking and scoring techniques
d. Risk metrics
155. Assume your pork producing company nds that there is an over- abundance
of pork products and competitors in the marketplace even though it has had
to implement Hazard Analysis and Critical Control Point (HACCP) processes
that are a regulatory requirement. Prots are lower than ever before in the
history of the company. Management is changing the company’s strategy
to also focus on seafood products. You have been asked to complete a gap
analysis to:
a. Determine resource capacity
b. Assess risks with this change
c. Compare the current portfolio mix with that with this change
d. Determine any requirements that must be addressed before the change is
implemented
156. Your online ordering company wants to add a component to its portfolio
that its sponsor believes will outdistance the competition, but it has risks
and also will be subject to regulatory approval. The purpose is to use para-
chutes to deliver the merchandise ordered through small helicopters so the
recipients receive their orders within three hours of the on line purchase. As
the portfolio manager you recognize this component is a major change and
will require resources if it is approved. You are now performing change
management using a change structure that:
a. Requires a change request
b. Facilitates impact analysis
c. Needs to assess dependencies
d. Requires an update to the roadmap
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