Practice Test 1 ◾ 169
Answer Key for Practice Test 1
1. c. An executive
Executives are interested in any risks that impact the portfolio, such as
the organization’s operating model, customer brand, the organization’s
reputation, impact on strategy and objectives, and any impact on any
existing products or services.
Portfolio Management Standard, p. 122
Task 3 in the ECO in Risk Management
2. c. Include portfolio benets, results, and value expected in the portfolio
strategic plan
As the purpose of the portfolio strategic plan is to address organiza-
tional strategy and alignment to it, the benets, or desired outcomes of
actions, behaviors, products or services, along with results and value
to be realized, should be documented in it so there is common under-
standing by stakeholders as to why portfolio management is essential.
Portfolio Management Standard, p. 46
Task 2 in the ECO in Strategic Alignment
3. c. Financial standing
The contracts management team is interested in the overall nancial
standing of the organization in case there are changes that affect port-
folio components. They also are interested in progress of programs and
projects along with contract impact and changes.
Portfolio Management Standard, p. 111
Task 3 in the ECO in Communications
4. b. Considered a legitimate right
In setting up and maintaining a governance model for portfolio man-
agement, organizational governance is a consideration. Among other
things, it is a process in which the organization responds to legitimate
rights of stakeholders; in this example to treat all stakeholders ethically.
Portfolio Management Standard, p. 62
Task 1 in the ECO in Governance
170 ◾ PfMP® Exam Practice Tests and Study Guide
5. b. The portfolio requirements should be evaluated
As an output of the Authorize Portfolio process the portfolio manage-
ment plan may require updates. These updates may involve the pro-
cess to authorize portfolio components because the requirements need
evaluation with the merger in this situation.
Portfolio Management Standard, p. 80
Task 3 in the ECO in Governance
6. a. The criteria to optimize the portfolio may be the same as that used in
the scoring model
A variety of tools and techniques can be used to optimize the portfolio
and have a list of components for possible authorization. Many organi-
zations nd it facilitates the process to use the same approach as in the
scoring model.
Portfolio Management Standard, p. 73
Task 6 in the ECO in Performance
7. c. Lessons learned
Other portfolio process assets to update include portfolio- related
people, processes, and technology; performance metrics; and risk
management.
Portfolio Management Standard, p. 55
Task 7 in the ECO in Strategic Alignment
8. d. Options analysis
Options analysis is a variant of cost/ benet analysis. If the organization
elects not to consider the component, the result is that often it is dif-
cult or even impossible to consider it in the future. It then can pursue
it when it is considered protable when additional information is avail-
able. The component is treated as an option.
Portfolio Management Standard, pp. 74, 102
Task 7 in the ECO in Performance
Practice Test 1 ◾ 171
9. b. Common causes
This type of analysis is portrayed in a risk component chart, a qualitative
risk tool and technique used in the Manage Portfolio Risks process, and
is helpful to see if there are common causes affecting various portfolio
components thereby facilitating decision making in terms of next steps
Portfolio Management Standard, pp.133, 135
Task 5 in the ECO in Risk Management
10. c. Monitor the situation as long as the risk is current
The risk register includes an identied owner for each risk. This person
is responsible for managing the risk, which means analyzing it, assign-
ing response actions, and monitoring it until it is closed. Depending on
the severity of the risk in terms of probability and impact on the portfo-
lio before implementing a response, approval by the portfolio manager
and possibly the oversight group may be required.
Portfolio Management Standard, p. 130
Task 4 in the ECO in Risk Management
11. b. To ensure the right resources are assigned
Portfolio reports are an output of the Manage Supply and Demand
process. Resource reports especially are reviewed to ensure the right
resources are assigned to the right components at the right time.
Portfolio Management Standard, p. 96
Task 1 in the ECO in Performance
12. d. To the portfolio manager
Portfolio component reports are provided to the portfolio manager. He
or she then reviews the reports and can consolidate them as appropriate.
Portfolio Management Standard, p. 116
Task 5 in the ECO in Communications
13. c. Capacity and capability
Resource capacity and capability reports demonstrate whether resources
are available to do the allocated work in the portfolio and also if they
have the required knowledge, skills, and competencies to do the work.
Portfolio Management Standard, p. 37
Task 8 in the ECO in Performance
172 ◾ PfMP® Exam Practice Tests and Study Guide
14. a. The project charter should be reviewed
The project charter is an input to the Manage Strategic Change process.
It should be reviewed to see if it and the portfolio still are aligned and,
if required, are updated.
Portfolio Management Standard, p. 56
Task 7 in the ECO in Strategic Alignment
15. b. The budgets allocated for day- to- day activities may be impacted
Achieving portfolio objectives may impact functional groups in their
day- to- day operations. For example, an operational budget may be
inuenced by portfolio management activities including allocation
of resources.
Portfolio Management Standard, p. 5
Task 3 in the ECO in Communications Management
16. b. Methods to evaluate the expected net benets
The benets realization planning shows expected benets for a given
portfolio. It then allows the Oversight Group the ability to evaluate the
expected net benets to help make informed decisions.
Portfolio Management Standard, p. 91
Task 4 in the ECO in Governance
17. c. The same expected return from the portfolio may be possible.
Such diversication may lead to reduced risk. The efcient frontiers are
not static.
Portfolio Management Standard, p. 103
Task 6 in the ECO in Performance
18. a. Organizational strategy
The best approach is to monitor portfolio performance against organiza-
tional strategy
Portfolio Management Standard, p. 9
Task 8 in the ECO in Performance
Practice Test 1 ◾ 173
19. d. Addresses organizational strategy
The portfolio is an input to the Provide Portfolio Oversight process as
the oversight group is concerned with ensuring the current or planned
components support organizational strategy.
Portfolio Management Standard, p. 82
Task 1 in the ECO in Governance
20. b. An effective resource assignment process is required
The lack of efcient and effective functional area processes and procedures
may have a considerable impact on portfolio management; one of which is
the lack of an effective resource assignment process to support the execu-
tion of components once approved through portfolio management.
Portfolio Management Standard, p. 27
Task 6 in the ECO in Strategic Alignment
21. c. Includes processes and change initiatives to accomplish organizational
strategies
A strategic focus supports the denition of portfolio management. It
includes the organizational processes and change initiatives to enable
organizations to prioritize, select, evaluate, and allocate scarce resources
to accomplish organizational strategies; these strategies are ones consis-
tent with mission, vision, and values.
PMI (2013) Managing Change in Organizations, p. 46
Task 1 in the ECO in Strategic Alignment
22. d. Risk management
Risk threat management is critical especially when there are interde-
pendencies between high prole portfolio components. The cost of the
failure of a component then is signicant. The same is true if the risk of
one component increases the risk to other components.
Portfolio Management Standard, p. 17
Task 3 in the ECO in Risk Management
23. b. Portfolio charter
Among other things, the portfolio charter lists the portfolio sponsors
and sets forth portfolio management roles and responsibilities.
Portfolio Management Standard, p. 49
Task 1 in the ECO in Governance
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