Practice Test 1 ◾ 189
95. b. Portfolio management plan
The purpose of this plan is to dene management’s approach and intent
to identify, approve, procure, prioritize, balance, manage, and report on
the components in the portfolio.
Portfolio Management Standard, p. 66
Task 4 in the ECO in Governance
96. d. Analyze the physical needs
Capacity and capability analysis are more than resources alone. In this situ-
ation, an asset capability and capacity analysis is appropriate to understand
the physical needs including equipment, buildings, and systems to under-
stand any constraints that may limit existing or proposed components.
Portfolio Management Standard, p. 74
Task 7 in the ECO in Performance
97. d. Project B but other qualitative items are not available.
Based only on the results of the benet/ cost analysis, Project B is pre-
ferred as its Benet Cost Ratio is 1.67. However, a weakness of only
using benet/ cost analysis is that other qualitative items are not avail-
able, which if known may change the recommendation.
Rechenthin, p. 158
Portfolio Management Standard, p. 51
Task 7 in the ECO in Strategic Alignment
98. c. Monte Carlo analysis
Monte Carlo Analysis is another form of probability analysis, a tool and
technique in the Optimize Portfolio process, in which a model is com-
puted many times with the input values chosen at random from the
probability distribution of these variables.
Portfolio Management Standard, p. 75
Task 7 in the ECO in Performance
99. b. Documented these decisions in portfolio reports
Portfolio reports are an output of the Manage Portfolio Risks process.
Governance recommendations should be part of the portfolio reports as
managing risks produces the need for various reports about the portfolio.
Portfolio Management Standard, pp.134–135
Task 6 in the ECO in Risk Management
190 ◾ PfMP® Exam Practice Tests and Study Guide
100. a. Regular reports on funds for authorized components
Once components are authorized, funds are updated regardless if
annual or multi- year funding is used. Regular reports are required as an
output of the Authorize Portfolio process.
Portfolio Management Standard, p. 80
Task 3 in the ECO in Governance
101. c. Identify, categorize score, and rank components
This is the purpose of the Dene Portfolio process and is necessary for
ongoing evaluation, selection, and prioritization.
Portfolio Management Standard, p. 64
Task 4 in the ECO in Strategic Alignment
102. c. Review the portfolio roadmap
In developing the portfolio management plan, it uses information from
the roadmap’s high- level strategic direction and extended timeline to
create these lower- level schedules for the components.
Portfolio Management Standard, p. 60
Task 4 in the ECO in Governance
103. b. Portfolio process assets
The portfolio manager updates and adds to portfolio process assets,
which include ones from stakeholders involved in the portfolio to inu-
ence its overall success. These are examples of portfolio communication
requirements, one of many portfolio process assets.
Portfolio Management Standard, pp.36–37
Task 5 in the ECO in Communications
104. c. Component 2
Each possible pair of components is compared. The table lists the
choices for ve components; as noted Component 1 is compared to
Component 2 and then 1 and 3, etc., until all possible comparisons are
made. The formula is (n X [n-1])/2) or ([5 × 4]/2). As the comparison is
done, Component 2 is the recommended choice.
Rechenthin, pp.54–55
Portfolio Management Standard, pp.68–69
Task 5 in the ECO in Strategic Alignment
Practice Test 1 ◾ 191
105. d. Value/ benets
As an output of the Optimize Portfolio process, portfolio reports may
require updates. Of particular importance is the value of the compo-
nents to the organization, and the benets each component contributes
to overall strategic goals and objectives.
Portfolio Management Standard, p. 77
Task 2 in the ECO in Performance
106. d. You emphasize strategic tness of the portfolio
Risks at the program or project level tend to arise within a specic pro-
gram or project. At the portfolio level, the emphasis is on increasing the
probability and impact of opportunities and decreasing negative impacts
adverse to the portfolio’s value, strategic tness, and component balance.
Portfolio Management Standard, p. 120
Task 1 in the ECO in Risk Management
107. d. The importance of documenting lessons learned
Lessons learned in portfolio management are an output of the Manage
Portfolio Value process. By analyzing them, a more effective process for
managing value can be determined.
Portfolio Management Standard, p. 104
Task 10 in the ECO in Performance
108. b. Is part of the portfolio strategic plan
The portfolio strategic plan, among other things, contains a portfolio
structure, which is a list of all the portfolio components and other work.
Portfolio Management Standard, p. 39
Task 4 in the ECO in Strategic Alignment
109. d. Qualitative benets
While a number of descriptors should be used, qualitative and quantita-
tive benets should be included to also support strategic goals.
Portfolio Management Standard, p. 67
Task 2 in the ECO in Governance
192 ◾ PfMP® Exam Practice Tests and Study Guide
110. d. Are considered external stakeholders
Stakeholders, once identied, should be classied into those that are
internal or external to the organization as a way to plan communica-
tions to them.
Portfolio Management Standard, p. 110
Task 3 in the ECO in Communications
111. b. Resource requirements are balanced according to the resource pool
The portfolio is an input to the Manage Supply and Demand process
as it shows active and planned components, which represent resource
requirements or demand. They then are balanced to determine how to
effectively manage the portfolio with limited resources.
Portfolio Management Standard, p. 94
Task 6 in the ECO in Performance
112. a. Benets schedule
Portfolio process assets should be reviewed as the performance man-
agement plan is prepared. In addition to various documents, they also
include various schedules. A benet schedule is useful as it will show
when benets from components are expected and thus assist in overall
portfolio value.
Portfolio Management Standard, p. 88
Task 4 in the ECO in Governance
113. a. Focus on needed competencies and develop competency proles for
internal staff
The rst step in this capability analysis is to determine the needed com-
petencies to support the new product line. Then, competency proles can
be reviewed if they exist, or they can be prepared to see whether internal
staff members possess the needed skill sets for the proposed work.
Portfolio Management Standard, p. 48
Task 5 in the ECO in Strategic Alignment
114. b. Identifying and managing liabilities
At the executive level, the focus often is on safeguarding stakeholder
investment, company assets, and identifying and managing liabilities as
risk concerns emphasize portfolio value.
Portfolio Management Standard, p. 122
Task 3 in the ECO in Risk Management
Practice Test 1 ◾ 193
115. d. Authorizing the portfolio
This is the purpose of the Authorize Portfolio process as resources are
allocated to develop or execute components, and reports are updated
and distributed.
Portfolio Management Standard, p. 77
Task 1 in the ECO in Performance
116. d. A stakeholder matrix
This matrix is used for stakeholder analysis. It lists each stakeholder
group and then describes their roles, interests, and expectations, provid-
ing useful information for communications planning.
Portfolio Management Standard, p. 111
Task 3 in the ECO in Communications
117. b. Dene roles and responsibilities for implementation
As portfolio management is implemented, roles and responsibilities in
the implementation process require denition as changing business pro-
cesses is a difcult undertaking.
Portfolio Management Standard, p. 24
Task 4 in the ECO in Governance
118. b. Risk management is essential
Risk management is ongoing in portfolio management. It is useful to
help to identify potential improvements in the portfolio in terms of
components. In this example, the new components are essential to
increase quality and customer satisfaction for the company.
Portfolio Management Standard, p. 119
Task 1 in the ECO in Risk Management
119. b. Change the prioritization model
The portfolio strategic plan will need revision because of this change,
and it contains the prioritization model, among other items.
Portfolio Management Standard, p. 55
Task 7 in the ECO in Strategic Alignment
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