84 ◾ PfMP® Exam Practice Tests and Study Guide
5. a. Use a probability and impact matrix
Risk probability or likelihood assessments are used to show the pos-
sible occurrence of a specic risk, while risk impact or consequences
assessments can show the potential effect of positive risks or opportuni-
ties and negative risks or threats. They can be displayed graphically in
a probability and impact matrix, a tool and technique in the Develop
Portfolio Risk Management Plan process.
Portfolio Management Standard, p. 126
Task 2 in the ECO in Risk Management
6. d. Monitor internal and external environment changes
The portfolio manager has a broader role in change management than
a project or program manager as he or she continuously monitors
changes in the environment, both internal and external.
Portfolio Management Standard, p. 6
Task 1 in the ECO in Risk Management
7. d. Select a mix of risk response strategies
The portfolio manager along with the risk owners can work together to
determine effective response strategies, while the risk owner on his or
her own focuses on the specic assigned risk.
Portfolio Management Standard, p. 134
Task 5 in the ECO in Risk Management
8. d. Time- to- market variability
The purpose of this tool is to determine the effects of portfolio velocity,
which means there is overall corporate pressure to adopt technology
challenges as organizations strive for breakout growth and innovation in
the face of increased complexity and an increase in the rate of change.
Portfolio Management Standard, p. 127
Task 2 in the ECO in Risk Management
Portfolio Risk Management ◾ 85
9. a. The willingness to take risks based on high rewards
One way that risk management differs at the portfolio level than at the
program or project levels is the organization may elect to enhance risks
for high rewards. In this situation, the technology may not work, but
if it does work, its acquisition will lead to enhanced market share and
greater prots.
Portfolio Management Standard, p. 120
Task 1 in the ECO in Risk Management
10. d. Market requirement variability analysis
This investment choice is one in which it analyzes changes in market
requirements in relation to the entire portfolio as shown in this situa-
tion, as an investment choice tool used in the Develop Portfolio Risk
Management Plan process.
Portfolio Management Standard, p. 127
Task 2 in the ECO in Risk Management
11. c. Portfolio management plan
This update is an output of the Manage Portfolio Risks process to
ensure this plan is updated as the agreed- upon actions are updated
and monitored.
Portfolio Management Standard, p. 134
Task 5 in the ECO in Risk Management
12. c. Weighted ranking and scoring
Weighted ranking and scoring techniques are a tool and technique used
in the Manage Portfolio Risks process. As part of the Authorizing and
Controlling Process, the Portfolio Review Board or comparable group,
may use these approaches during a regular meeting or a special meet-
ing to concentrate solely on risks.
Portfolio Management Standard, p. 132
Task 4 in the ECO in Risk Management
86 ◾ PfMP® Exam Practice Tests and Study Guide
13. d. Risk tolerant company
Some organizations are risk adverse, while others are risk tolerant. This
company is moving quickly into a new way of working as a way to pro-
vide greater benets to customers and promote market leader ship.
Portfolio Management Standard, p. 123
Task 1 in the ECO in Risk Management
14. d. Risk management strategies
The size of the organization and program and project management
practices are considerations in identifying portfolio stakeholders, but
certain stakeholders are identied based on the portfolio’s goals and its
risk management strategies.
Portfolio Management Standard, p. 26
Task 1 in the ECO in Risk Management
15. b. Review the negative risks for root causes and assumptions
Once a negative risk is identied, it should be reviewed using root
cause analysis to determine if there are other associated risks and also
to see if the risk can be avoided once the cause is identied. As well,
assumptions are a source of risk and require review using assumption
analysis techniques.
Portfolio Management Standard, pp. 130–131
Task 4 in the ECO in Risk Management
16. a. Maintaining a complete risk register and highlighting the critical risks
The risk register is used throughout portfolio management. A column
can be added to show if it is a critical risk, and reports for stakeholders
can focus on the status of these critical risks, the date of possible and
actual impact, recovery actions, and the date the risk is closed.
Portfolio Management Standard, pp. 37, 131
Task 4 in the ECO in Risk Management
17. c. A tornado diagram
The results of a sensitivity analysis can be displayed in a tornado dia-
gram to show the parameters that lead to a high degree of variability
and those with a lesser effect.
Portfolio Management Standard, pp.132–133
Task 5 in the ECO in Risk Management
Portfolio Risk Management ◾ 87
18. d. Requires an understanding of the portfolio roadmap
The portfolio roadmap shows the various components and their inter-
dependencies, among other things, which can be sources of risks. As
well, the portfolio management plan also requires an understanding of
overall portfolio funding, including the budget allocated to risk manage-
ment, and technical knowledge regarding the portfolio components.
Portfolio Management Standard, p. 130
Task 4 in the ECO in Risk Management
19. d. The need to focus on investment choices
Investment choice analysis is a tool and technique in the Manage
Portfolio Risks process as investment choices show portfolio alignment
and can show any gaps in terms of investment to the portfolio as these
gaps may be risks.
Portfolio Management Standard, p. 133
Task 5 in the ECO in Risk Management
20. c. The quality of portfolio management may be a structural risk
Structural risks involve the organization’s ability to organize its portfolio.
This situation is an example of over- ambitious plans in diverse areas,
and inconsistent strategies required to realize them, which may be
threats to portfolio success.
Portfolio Management Standard, p. 122
Task 3 in the ECO in Risk Management
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