Practice Test 1 ◾ 149
125. Having worked in portfolio management for several years, assume you were
hired as the portfolio manager for a Real Estate Investment Trust, one of the
largest in your country that specializes in apartments. The company contin-
ues to grow and wants to maximize value and prots for its investors. As
you set up processes and procedures for portfolio management, you know
from past experience that buy in from executives is insufcient. As you pre-
pare a communications strategy, you focus on:
a. Satisfying important information needs of stakeholders
b. Surveying stakeholders through a questionnaire to determine information
requirements
c. Using focus groups to assist in determining information needs
d. Focusing rst on the executive team’s communications requirements and
then involving others
126. Many people in your country are no longer eating food from cans because
of the risk of botulism and eColi O1H747. Your low acid canned foods
company is seeing its revenues decrease as a result, and it is updating its
overall strategy for the company to diversify into other markets as well as
to add an aggressive marketing campaign to ensure the public that its low
acid canned foods are generally recognized as safe by the Food and Drug
Administration. This means in terms of portfolio management:
a. Each proposed component must demonstrate business value before it is
undertaken
b. The ROI for existing components should be reviewed to determine if
they should continue
c. The existing inventory of work should be validated against the updated
strategy
d. The benets to be realized by existing components require standard KPIs
tied to critical success factors
127. Different stakeholders will have different portfolio reporting requirements.
Sponsors for example will have a great interest in:
a. If the portfolio will meet organizational strategy
b. Status in achieving benets
c. Overall portfolio value
d. Status in terms of other authorized components
150 ◾ PfMP® Exam Practice Tests and Study Guide
128. As the portfolio manager in the third largest automotive manufacturer in
your country, you have a large number of components especially new
vehicles each year but also support for dealers, advertising, maintaining the
brand image, increasing market share plus continuous improvement initia-
tives. You have contingency reserve to use to prepare to handle any risks
that may occur, which is based on:
a. Expected monetary value
b. Return on investment
c. Expected nancial benets
d. Equity protection
129. Although it has taken signicant time, you and your team inventoried all the
work under way in your new product development company. This list of
components should be:
a. Included in the portfolio roadmap
b. Part of the portfolio management plan
c. Prioritized for effective resource allocation
d. Maintained by the portfolio manager and continually updated
130. Assume you have determined the prioritization criteria your Portfolio Review
Board will use, and you have reviewed the criteria with your key stakehold-
ers to attain their buy off and occurrence. The purpose in establishing these
criteria is to:
a. Ensure each component in the portfolio is in alignment to strategic goals
b. Incorporate the key stakeholders’ risk tolerances as a criterion for
consideration
c. Enable comparison among components
d. Set forth measurable goals with KPIs
131. Capability and capacity analysis are useful tools in portfolio performance
management. In using this type of analysis a best practice is to:
a. Employ a resource management process
b. Evaluate knowledge, skills, and competencies
c. Use it once portfolio resources are included in the portfolio performance
management plan
d. Evaluate resource optimization
Practice Test 1 ◾ 151
132. Assume your company is a leading producer of AA and AAA batteries.
However, it is a competitive market, and customers desire batteries with a
longer life and a smaller size so they will not require replacement. As you
set up categories for portfolio components, you will continue to produce
your current product line as well as pursue advanced products to meet cus-
tomer needs. A useful component category, therefore, is:
a. Benets
b. Business imperatives
c. Stakeholders
d. Technology capabilities
133. Assume you are the portfolio manager for a leading drug store in your coun-
try that offers numerous products. In the past four years, nearly every store
has had to enlarge its pharmacy unit and hire additional staff members with
the aging population. Observing this change, two years ago, stores set up
clinics to provide customers with immediate care. As you see the growth in
the stores in the health arena, you are looking at trends and realize:
a. Alcohol, tobacco, and sugar soft drink products should no longer be
offered
b. Each store requires a balance between its health care services and prod-
ucts that may have adverse health effects
c. Customers wonder if they should trust the health care services offered
given the other available products
d. For the health care clinics to be viewed with integrity, a medical doctor
must be available at each store
134. Assume you are co- owner of a small consulting rm. Previously, you worked
as a managing partner in one of the larger consulting rms in your country
that had a dened portfolio management process to determine key opportu-
nities to pursue to focus not solely on proposal win ratio but to aggressively
emphasize capture ratio. Now in your new company in terms of portfolio
management, the best practice to follow is to:
a. Work with your business partner in terms of portfolio management
b. Have your Board of Directors serve as a Portfolio Review Board
c. Involve your business partner plus the rm’s subject matter experts in
portfolio decisions
d. Set up an independent group of advisors to meet quarterly as a Portfolio
Review Board
152 ◾ PfMP® Exam Practice Tests and Study Guide
135. Your IT company has been successful as it is able to deliver projects on time
without the need for rework and within the allocated budget. Your custom-
ers have been astonished with the results and are using your company for
additional work, plus they have been recommending your company to oth-
ers. Your company is experiencing tremendous growth and wants to ensure
it can take on the new work with existing resources, both people and sys-
tems, or whether it will need to use outsourcing. Given its outstanding repu-
tation, your executives wish to avoid the need to outsource. You have been
asked to perform a capacity analysis. A best practice is to:
a. Prepare a model of the current conguration and modify it to determine
future capacity requirements
b. Determine and document existing assumptions
c. Inventory staff members to assess their level of competencies and exist-
ing workload
d. Use resource leveling in an enterprise project management information
system
136. Your organization tried implementing portfolio management in the past,
but even though it purchased a sophisticated automated software system
for scoring and prioritization, it was not successful. After a year of com-
plaints about the system, the executive team disbanded it. Now, resources
are scarce, and some executives who were involved in the earlier attempt
have left the company. The new CEO asked for a list of ongoing programs,
projects, and operational work, and you could not provide one even though
you direct the Project Management Ofce. He wants this inventory so it then
can be used as the starting point to implement portfolio management. You
and several others stated it did not work previously and do not believe it
will work in the company. The CEO then hired a person to be the portfolio
manager from outside who reports directly to him. The portfolio manager is
emphasizing the importance of resources working on initiatives aligned with
organizational strategy as part of the:
a. Portfolio performance plan
b. Portfolio roadmap
c. Portfolio communications strategy
d. Portfolio charter
Practice Test 1 ◾ 153
137. Before any information in your web- based technology company is commu-
nicated externally, it must be submitted to the company’s Public Relations
Department to ensure sensitive information is not disclosed inadvertently
to competitors. The Public Relations Director must sign off on all external
information. You need to, as the portfolio manager:
a. Make sure your team is aware of this requirement
b. Meet with this Director to explain the purpose of the communication
c. Limit the frequency of external communications to stockholders
d. State this requirement in the communication plan
138. Assume you are preparing the rst portfolio risk management plan for
your outsourcing company, which typically handles call centers around the
world. While the company has implemented portfolio management and has
a Portfolio Oversight Group, it did not previously assess risks to the portfo-
lio itself. Instead, it assumed risks would be managed at the project level.
However, numerous customer complaints have been received. The root
cause is once a new call center is established, limited if any planning is
done as the manager rushes to have it ready and operational as soon as pos-
sible. This has led to a lack of understanding as to what is required for the
call centers to be successful. In preparing this plan, you are reviewing the
portfolio management plan because it:
a. Contains the portfolio vision statement
b. Provides the organization’s risk tolerance
c. Provides guidance on stakeholder engagement
d. Includes the portfolio performance matrices
139. Information and direction about the organization’s vision, mission, prioritiza-
tion, and resources should be obtained before the portfolio’s strategic plan is
developed by reviewing:
a. Knowledge repositories
b. Portfolio roadmap
c. Organizational process assets
d. Governance model
140. Roadmaps may be prepared to show different elements, and at the begin-
ning they may not provide details of the various components. As a high-
level plan at the portfolio level, the roadmap:
a. Identies internal and external dependencies
b. Serves as a master schedule to show the timing of approved components
c. Contains all the details of program and project roadmaps
d. Serves to identify issues
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