114 ◾ PfMP® Exam Practice Tests and Study Guide
15. As the Director of Human Resources, you were pleased to be asked to join
the Portfolio Steering Committee in your organization as you feel you can
contribute given the scarce subject matter experts as your company begins
to enter a new market in children’s toys rather than its main focus on video
games and apps. Children’s toys will represent a new portfolio in the com-
pany. However, while you will concentrate primarily on the resource alloca-
tion issue as you work to determine the types of projects and programs to
pursue, it is important as well to recognize that:
a. External procurements may be needed to acquire the SMEs
b. The budgets allocated for day- to- day activities may be impacted
c. The existing portfolio’s prioritization criteria will denitely require
changes
d. The benets from existing programs under way may not be realized
16. Assume you completed your portfolio performance management plan, and it
was approved by the Oversight Committee. This plan, with an overall pur-
pose to maximize portfolio performance, describes resource allocation and
resource- related issues among other items. In it a key component is benets
realization. This emphasis on benets planning provides:
a. Examples for templates for benets realization planning
b. Methods to evaluate the expected net benets
c. An approach focusing on continuous improvement in overall
performance
d. Methods to assist in benet identication
17. Assume your company recently diversied, and in addition to producing its
recognized brand of ice cream products, it now also is producing cereal and
nutritional products. Assume you have been using the Efcient Frontier to
manage portfolio value. With diversication to these new products:
a. Each product line should have its own portfolio to use the Efcient
Frontier approach effectively
b. The best possible portfolios are shown above the portfolio curve
c. The same expected return from the portfolio may be possible
d. The new potential portfolio outcomes concerning success criteria can be
determined
Practice Test 1 ◾ 115
18. Working as the portfolio manager for your business unit of a major aero-
space organization means you have a variety of programs, projects, and
operational activities under way. You have set up a number of reports on the
progress of the portfolio for your various stakeholders, but the best approach
is to monitor the progress of the portfolio against:
a. Organizational strategy
b. Organizational goals
c. Specic key performance indicators for the business unit
d. Organizational critical success factors
19. In your web app company, the portfolio is constantly changing. It is not
unusual for a new proposal to be submitted each day and for other com-
ponents to be terminated as a competitor was rst to market. The Portfolio
Review Board usually meets daily in this fast- paced environment as it:
a. Evaluates the portfolio for specic actions it needs to take
b. Ensures there are no open issues from past meetings that affect different
components
c. Provides a high- level view of the portfolio’s direction
d. Addresses organizational strategy
20. Your State Governor is scally conservative and has limited signicantly the
nancial resources to be provided to each University in the eight Universities
in the State’s system. Recognizing your University is going to have a 55%
reduction in its budget, your Chancellor is re- evaluating all the work that is
under way to see how much it can do with fewer resources. Every depart-
ment will have layoffs at all levels. However, the University does have a
portfolio management process in place, which people support. This means
for effective portfolio management:
a. Each portfolio in the University should have the same restrictions in
terms of available funding
b. An effective resource assignment process is required
c. Pareto analysis should be used to focus attention on those components
with the greatest impact
d. Portfolio maturity should be a factor in determining plans and decisions
116 ◾ PfMP® Exam Practice Tests and Study Guide
21. One of the ten underlying principles of portfolio management involves a
strategic focus. Assume you are going to have a short meeting with your
CEO tomorrow, and you want to succinctly describe it. You will tell the CEO
it is important since it:
a. Emphasizes the need for portfolio management to attain strategic
objectives
b. Provides a clear basis for decision making
c. Includes processes and change initiatives to accomplish organizational
strategies
d. Balances conicting demands
22. Assume you are managing the corporate portfolio for your company noted
for many products primarily focused on farm equipment. Recently it has
diversied into other markets especially with the economic downturn in
the country. While many of the traditional products are in the portfolio as
new features are added to enhance customer satisfaction, one of the new
product lines is a high- prole program that is ranked number ve in the
corporate portfolio. As the portfolio manager, you know this program has
several interdependencies with other projects and programs, and recently
this high- ranked program has experienced difculties as needed technol-
ogy is not available externally, and internal staff lacks the needed compe-
tencies to develop it. Its termination will be discussed at Friday’s Portfolio
Board meeting. You plan to discuss these interdependencies as part of your
responsibilities in:
a. Resource allocation
b. Portfolio balancing
c. Financial management
d. Risk management
23. 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 sponsors are
listed in the:
a. Governance plan
b. Portfolio charter
c. Portfolio performance plan
d. Portfolio Review Board charter
Practice Test 1 ◾ 117
24. Portfolio balancing can be done in several different dimensions based on
organizational preferences. When your software development company,
which is CMMI Level 5 certied, began to focus on portfolio manage-
ment four years ago, you started with a simplied ranking approach and
now moved into using an automated, sophisticated weighted scoring soft-
ware tool throughout the organization. In terms of portfolio balancing, it is
appropriate to:
a. Balance the portfolio across the organization
b. Balance the portfolio according to categories
c. Balance the portfolio by business unit
d. Balance the portfolio in terms of expected value of benets
25. While a variety of prioritization approaches are available and are useful in
portfolio management and many software packages support the various
approaches, it is important to recognize:
a. Resource constraints
b. Mandatory criteria
c. Allocation of funds across categories based on business value
d. Methods to determine which components should receive the highest
priority
26. Assume you work in new product development, and you believe you
have identied a component that will be a breakthrough for the company.
However, you performed a capacity analysis with the help of your EPMO to
assess resource availability especially in certain skill sets. You learned that
key computer scientists required by this component were in short supply, yet
you still believe this component should be in the portfolio. To convince the
Portfolio Review Board to consider it, you decide to use:
a. Resource smoothing
b. Business value analysis
c. Market analysis
d. Options analysis
118 ◾ PfMP® Exam Practice Tests and Study Guide
27. Assume you are the portfolio manager for a company that specializes in
software, including portfolio management software. It has many components
under way to enhance the existing product line but also to move the com-
pany into Cloud computing. You regularly prepare reports on the portfolio
status but lately have had a large number of stakeholders request ad hoc
reports. You decided to survey your stakeholders to learn about their infor-
mation needs. You next decided to hold some one- on- one interviews with
several interested and inuential stakeholders in terms of communications
requirements. From these interviews you are concerned that some stake-
holder groups may be missing so you decided to:
a. Conduct another survey
b. Hold some lessons learned sessions
c. Have a brainstorming session
d. Convene a focus group
28. Assume you are the portfolio manager for a legacy software company. For
many years, your company was one of the top ve leaders in software
development, but as newer and more efcient software was invented, it
began to lose market share. Your company then found its services were
needed as legacy systems were converted, especially since Cloud comput-
ing now is so popular. But it has lost revenues increasingly over the years.
To gain market share and provide greater portfolio value, the executive team
decided it should:
a. Focus on channel partnerships
b. Hire people with competencies in Cloud computing and enter this market
c. Recognize change takes time but retrain employees to enhance customer
satisfaction
d. Focus on supplier value by partnering agreements
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