Practice Test 2 ◾ 235
95. Recognizing the importance of an effective portfolio management process
that people within the organization will embrace at all levels, you are
leading this initiative at your University, which already has a Program
Management Ofce. You decided to prepare a roadmap to best implement
the structure and processes, but before doing so, you rst worked with key
stakeholders in order to:
a. Dene their expectations for portfolio management
b. Determine the mission
c. Prepare a vision
d. Prepare a communications strategy to avoid mis- communication
96. Recognizing the need for specialized resources in your food additive com-
pany and since these resources tend to be in short supply and difcult to
obtain externally, your company purchased and implemented an enterprise
resource planning software package. This ERP system interfaces with the
scheduling software and knowledge management system. It also changed
over to critical chain scheduling. This means the company:
a. Recognizes now that the next step is resource competency proles
b. Can tell when drum resources will be required
c. Emphasizes resource productivity as a way to reduce overall costs
d. Is using job shadowing as a means for others to acquire expertise of
these SMEs
97. Assume you work for a pharmaceutical company. You are to recommend
one new component to be optimized in the company’s portfolio. You only
can select one because of resource constraints. You can select Project A to
develop a web site, Program A to enter the music video market, Program B
for a major nationwide tour, or Project B for new T- shirts. You have net pres-
ent value (NPV) data available to assist you in making your recommendation
as follows:
Project A NPV Program A NPV Program B NPV Project B NPV
5% = 3,524 5% = 2,201 5% = 6,400 5% = 3,055
10% = 2,901 10% = 2,254 10% = 3,275 10% = 2,857
15% = 1,563 15% = 1,632 15% = 1,679 15% = 1,125
You recommend:
a. Project A
b. Program A
c. Program B
d. Project B
236 ◾ PfMP® Exam Practice Tests and Study Guide
98. Assume you are the Service Information Department’s Director in your
company that manufactures tractors and other farm equipment. You manage
components such as services to dealers and development of operational and
support manuals. You lack awareness at times as to when a new product is
about to be available and then must provide needed resources to support it
immediately. Time to market is critical in this industry. In terms of portfolio
risk management, your primary risk concerns involve:
a. Application of best practices
b. Processes to support change
c. Shifting portfolios
d. Technological advances
99. Working to establish a portfolio management practice in your ice cream
company, with franchises throughout your country, you are using portfolio
process assets, organizational process assets, and best practices from bench-
marking forums and in published reports. You also are evaluating various
external environmental factors, and in this scenario, one to consider is:
a. Work instructions
b. Calendars
c. Component proposals
d. Workmanship standards
100. An internal auditor recently was asked to review all the processes under way
in the organization including those at used in program, project, and portfolio
management. In the audit team’s report, one item noted was the impact of
the project processes to those at the portfolio level. This item is signicant as:
a. All three must be aligned to the organization’s vision and strategic goals
b. There is a lack of transparency impacting the selection process
c. Project managers lack training in the portfolio process
d. Greater visibility into the prioritization process is needed
101. Each month, your Finance Department issues a series of reports on the sixth
day of the month. This is especially helpful to you as you are the portfolio
manager and know these data are of interest to the members of the Portfolio
Review Board. When the company implemented portfolio management, it
decided to hold Board meetings on the 10
th
day of each month. To assist in
this process, you are using a communications calendar as it:
a. Shows portfolio communication dependencies
b. Describes stakeholder reporting requirements
c. Emphasizes value- added impacts to the portfolio’s performance
d. Complements the portfolio strategic plan
Practice Test 2 ◾ 237
102. Your retail foods company has numerous people who are in a union, and
your management is concerned that because of the economic downturn
in your country, that there could be a strike for higher wages that could last
for some time. The Portfolio Oversight Group realizes it must continue to
add new components to its mix to remain competitive especially as special-
ized food stores are opening close to your stores’ locations but is reluctant
to do so given the union situation. As the portfolio manager as you work to
optimize the portfolio, you are striving to decrease their concerns by using:
a. SWOT analysis
b. Scenario analysis
c. Competitor analysis
d. Probability analysis
103. The ROI on your overall portfolio has led your management in your manu-
facturing company to question whether streamlining is needed to remain
protable before approving new components to be part of the portfolio. It is
concerned as to whether its factories are operating efciently and/ or whether
some are not needed at all. To assist in their decision making, you have
been charged with conducting a:
a. Sensitivity analysis
b. Gap analysis
c. Capacity analysis
d. Dependency analysis
104. Assume you have been the portfolio manager, a new position in your Water
Resources Department, for a year. A Portfolio Oversight Committee meets
monthly, and you have set up categories for your components to best rank
or score them and for resource allocation. Although groundwater is plenti-
ful, the Climate Change Interest Group has been lobbying the Department to
provide greater emphasis on sustainability, and this group is lobbying across
your country. Your Oversight Committee requested that a sustainability cat-
egory be added to the current list. You need to:
a. Update the portfolio strategic plan
b. Update the portfolio management plan
c. Update the portfolio roadmap
d. Review existing components in the portfolio to see if they should be in
this category
238 ◾ PfMP® Exam Practice Tests and Study Guide
105. Assume your organization is in the underground sprinkler system business.
It is striving to be the market leader in this eld in your State, and a major
compliant from customers of sprinkler systems is the need to repair them
frequently. As your company strives to be the market leader in the eld, it is
offering a new series of products as part of its new product pipeline. This
pipeline provides:
a. Stakeholders with condence that the company is continually looking at
new products to continue to thrive
b. A leading indicator of future sales potential
c. An approach to show the expected net benets of the overall portfolio
d. A balanced scorecard approach to measure performance
106. Assume you have identied ve categories for the risks in your portfolio:
organizational risk, performance risk, market risk, image risk, and nancial
risk. For each one in your portfolio risk management plan you also want to
assess how you would measure it. In this measurement section of the plan,
you also can include:
a. When portfolio risk management will be performed
b. The various risk management activities
c. Team member involvement
d. Risk appetite
107. In using a bubble diagram, there are a number of different variations to con-
sider. In your company, you decide to set one up that shows business units,
investments in various categories, investments in the business unit, and the
components by category. You also are using the size of the bubble to show
the importance of the component. Such an approach is effective as it:
a. Accurately depicts the data that are used
b. Ensures there is only one representative diagram
c. Provides an overall view of the portfolio
d. Shows when the components will be completed
108. You are the portfolio manager in your defense contracting rm. Your Portfolio
Review Board has approved the strategic plan you prepared and now has
asked you to prepare a portfolio management plan in order to describe:
a. Your responsibilities as the Portfolio Manager
b. A chronological view of the high- level strategic direction
c. The alignment of the portfolio objectives with the strategic plan
d. Management’s intent to prioritize the work to meet the strategic objectives
Practice Test 2 ◾ 239
109. Assume you work for the leading high- end department store in your coun-
try. It is considered to be the most fashionable store, and people enjoy the
entire shopping experience. Many have personal shoppers to accompany
them. However, earlier this year, many customers were victims of credit
card fraud, and sales have decreased. You are sponsoring a new program
so robots will be available at the time of checkout and will ensure no one is
around when the customer leaves. The robots are to be fun for customers to
see and equipped so that security breaches cannot occur, providing a high
level of condence for shoppers. The program has an aggressive time table
and is to be complete in three months, making it the leading priority in the
portfolio. As the program’s sponsor, your expectations are to know about:
a. All developments of consequence
b. All changes in the portfolio
c. Portfolio milestones, risks, cost, and schedule
d. Portfolio changes, risks, and issues
110. Assume your organization has an organizational strategy, a dened mission
and vision, and strategic goals and objectives, which are reviewed at least
annually. It is implementing portfolio management, and it therefore needs
key organizational enablers to assist in this process, which include:
a. A Portfolio Management Ofce
b. Metrics or Key Performance Indicators
c. Knowledge, skills, and competency proles of staff members
d. Dened roles and responsibilities
111. Your transit authority, which serves a major metropolitan area in your coun-
try, has had a series of late completions of its programs and projects, numer-
ous customer complaints regarding poor service, and complaints from its
staff about being overworked. The CEO was red, and a new CEO from
a new product development organization, in which strict governance pro-
cesses and stage gate reviews were held, was appointed. He then selected
you as the Portfolio Manager and has set up a Portfolio Review Board. You
are now collecting data on existing components. As you do so, you realize:
a. Benets should be collected for each component
b. The data should be quantitative
c. Each program or project manager should be interviewed
d. It will be revised several times
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