PfMP Portfolio Management Professional (PfMP) Question and Answers

You are the manager of a major portfolio with a variety of stakeholders and stakeholder groups. you know that managing communication is key to success and you stress on maintaining a high communication level. As part of the portfolio communication management, multiple documents are prepared in order to effectively manage communications. The Communication matrix is one of the prepared documents, what does it include?

Managing risk is key to the success of any initiative. Risk is considered to be inherent in any activity we do in project management and at any level. As part of managing risks, the portfolio manager applies multiple analyzes and uses tools to help dealing with risks. What does the portfolio manager use to visualize risks impact on portfolio strategic objectives such as profitability?

Values assist in guiding actions, evaluations, and decisions. Assume your organization is considering entering into a consortium to produce a heliumcontrolled car. Once the helium is supplied, additional amounts will not be needed. The car is to be personally appealing with a focus on an inexpensive cost to increase marketability. The consortium will enable each firm to capitalize on the expertise of the other firms in it, but the customer will view it as a separate entity. If your organization enters into the consortium, it must justify the value to the portfolio of doing so. In addition to ensure benefits are realized a focus is needed on:

Recognizing that different components can have different types of risks, you decide to see how each risk affects the components. For example, assume you have identified a structural risk as overly ambitious plans and determine this risk affects three of the top five risks in your portfolio. You also have identified an environmental risk, in terms of whether the component will promote the organization's vision, which affects two components. Each component then has some other types of risks that affect it. From such an analysis you can see:

Your company changed its executives due to the lack of benefits realization and previous corruption issues. The new management has informed you that as of now, this will not change any process in the portfolio and everything will remain the same. However, only the risk tolerance for the organization will be impacted, what will you do as a portfolio manager?

Risks perspectives differ within the organization between executive management, operations management, portfolio management and project/program management. Which of the following are common risk concerns across the organization?

A portfolio manager on one of the major sub-portfolios in your portfolio has tendered his resignation and gave you a 2 months notice. This unexpected change will require you to take immediate action with the governance board. Which of the following processes will be handling this situation?

What can you tell about the following portfolio status, having CPI weight = 80% and SPI weight = 20%

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You have been recently assigned to manage a new portfolio that is supposed to shift the company from silo-based to a projectized one. You are in the process of initiating the portfolio. You are currently developing the strategic plan. Upon finishing it, you are expected to present

In a portfolio, data is an abundant asset, and managing the information aiming for a better decision making is critical. For this you use a variety of Quantitative and Qualitative analysis methods. Considering that you are currently working to quantitatively measure component values, however a few components have intangible benefits and can not be measured using quantitative analysis. How do you plan to proceed?

Portfolio Prioritization Model is included in the Portfolio management plan and guides the ongoing decisions as to which portfolio components should be added, terminated, or changed; which of the following is correct regarding the Prioritization Model purpose and content?

You prepared a portfolio risk management plan when you replaced the previous portfolio manager three years ago. However, recent structural and execution risks have affected the portfolio adversely, resulting in lost opportunities and a decrease in overall return on investment. You are updating the risk management plan as now stakeholders can see its value. In doing so, you can use some portfolio process assets such as:

You are managing a complex portfolio with high risk levels due to emerging technological breakthroughs and a short benefit window to market your product. You know that managing risk is key to success and you are coaching your team on the same. You are currently developing the Risk Management Plan. What can you use as inputs to this process?

Embracing a management-by-projects culture means there tends to be far more projects to pursue than available resources. An approach then is required to guide decisions as to components in the portfolio. A best practice to follow is to:

You are managing a portfolio for your company and are trying to balance the tasks that will be done internally based on the availability and the ones that will be outsourced. Managing supply and demand is a recurring activity in the portfolio life cycle and results in changes in resource utilization and resource efficiency. What is the expected outcome from managing supply and demand?

You have been assigned as the manager for a major transformation portfolio in your company. You have a new direction in sight and you need to work with the team to attain the end goal and achieve the expected strategy. You have just finalized managing the strategic change and you are expected to present the following documents:

Working previously in the financial industry and studying finance and risk in graduate school, you are familiar with Markowitz's Efficient Frontier theory. Now assume you are the portfolio manager for a state government agency. Your agency has a reputation of being risk adverse but given recent budget cuts, you have convinced your executive team it needs to pursue some new programs and projects to demonstrate its benefits to the state. You decided to apply the Efficient Frontier concepts to show them the current state of its components in terms of risk and associated costs. You explained the portfolio is efficient if it has:

When managed correctly, the balanced scorecards can change the way an organization does business. Balanced scorecards keep focus on results. As a portfolio manager, you know that the purpose of using the balanced scorecards is

As part of the new strategic direction, the executive management has decided to create a portfolio for the development of a new product. You have been assigned as the portfolio manager. What should you do as a first step?

comes to this type of organizations, which of the following statements is true?

Since you work for a global aerospace and defense organization, it decided to pilot the implementation of portfolio management in its cargo aviation business unit. You were asked to lead this initiative and realized before you could proceed, you should find out information about all the existing projects, programs, and operational activities. This task took three months to complete, but with this list, you now can use it to set up categories for the work that is under way and to also define criteria to use to propose new components. As a result you should:

Assume you are creating a roadmap for your portfolio and will present it to key stakeholders and then to the Portfolio Review Board. You realize you will be adding additional detail to it, but you also believe its graphical format will be useful. In developing it, you decide to reference prioritization, dependencies, and organizational areas so you should consult the:

Although you are the Portfolio Manager in your company, you also are the Enterprise Program Office Director, and it consumes most of your time. Your executive team has lost interest in regular portfolio review meetings, the few that are held are routine, and any proposed component receives automatic approval. The Executive Vice President for Human Resources spoke to the CEO as she noticed some people seem to be completely overloaded, they are actively looking for new opportunities, and are then leaving the company. She also pointed out that others seem to have idle time. Her comments got the CEO's attention, and you have been asked in your role as the portfolio manager to create an up-to-date list of qualified components in the portfolio. You are doing so in order to:

In your telecom company, a number of criteria must be considered as you develop your approach to prioritize components in the portfolio. Your management insists that to be competitive the products must be first to market or the window of opportunity is lost with the result being not only lost revenues but also lost productivity. Another criterion to consider is:

As a portfolio manager you will use a variety of artifacts and documents that will help you better manage the portfolio and better communicate progress and status with stakeholders. The roadmap is considered the most used document in the portfolio and eases your work being able to present the status on a single graphical representation. Early on during the portfolio lifecycle, you prepare the roadmap. An output of this process is

You have been assigned as the manager for a major transformation portfolio in your company. You have a new direction in sight and you need to work with the team to attain the end goal and achieve the expected strategy. For this you start by developing the strategic plan. What output do you expect from this process?

A portfolio manager needs to continuously balance the need and requirements with the available resources and needs to maintain a balanced portfolio and portfolio resources in order to optimize delivery. Capability and Capacity analysis is performed in 4 of the portfolio management processes and it serves a slightly different purpose in each and every one of them. When it relates to optimizing portfolio, what is the purpose of using this analysis?

You are currently in the process of defining a portfolio by forming the qualified list of components that will be later evaluated, selected and prioritized. What do you expect as outputs from this process?

As you grow older, you gain more experience and things that once seemed hard to assimilate, can become very easy. One junior member of your portfolio management team is confused on the relationship between the Optimize, Authorize and Provide Oversight processes. What could your advice to him be?

You want to ensure that the Portfolio Review Board is able to make key decisions at each meeting. As the portfolio manager, you and your staff are responsible for scheduling the meetings, providing the agenda, taking minutes, tracking open issues, and documenting and communicating decisions that are made to key stakeholders. Before each meeting, you feel it is a best practice to:

As you focus on managing the value pf the portfolio, you find that portfolio variance/alert reports are helpful. Assume you have been using a 'traffic light' format as it is easy to prepare, but an objective is to:

When we talk about portfolios, programs and projects, it is inevitable to mention the business value which is the sum of tangible and intangible assets of an organization, also known as the net quantifiable benefit. When it comes to business value, at which level of the organization is the delivery of Business Value optimized?

You are managing a complex portfolio with high risk levels due to emerging technological breakthroughs and a short benefit window to market your product. You know that managing risk is key to success and you are coaching your team on the same. While planning for risk management, multiple investment choice tools are used as part of the quantitative and qualitative analyzes. Which of the following tools determine the effect of changing the portfolio?

As part of the Portfolio Communication, the Portfolio Manager analyzes the raw data assimilated from the portfolio process assets and from the stakeholder analysis. This analysis aims to isolate the data that hold value to the receiving audience. Which tool can the portfolio manager use to help him in performing this analysis?

Assume you are the portfolio manager for a leading drug store in your country 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:

Chartering a portfolio is a major step in getting the needed authorizations to execute the portfolio. Your are currently developing the charter and considering the following inputs

Your State Governor is fiscally conservative and has limited significantly the financial 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 department 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:

Assume your company recently diversified, 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 Efficient Frontier to manage portfolio value. With diversification to these new products:

Assume you work in new product development, and you believe you have identified 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:

Your executive management has been recently undergoing a change from a functional organization to a projectized one and is currently assessing the volume of work that the organization can execute. Which of the following tools and techniques will decide the volume of work and components that the organization can execute?

After the stakeholder analysis is complete, a best practice is to put stakeholders into a matrix to develop a communications management strategy. A simple but useful approach is to set it up to show:

You are managing a complex portfolio with high risk levels due to emerging technological breakthroughs and a short benefit window to market your product. You know that managing risk is key to success and you are coaching your team on the same. Risk Categories, criteria and probability and impact are updated as a result of Developing the Risk Management Plan. These updates are recorded in which of the following?

You have been recently assigned to a critical portfolio in your company and wanted to start right away and decided to begin with aligning the strategic management of the portfolio to the organizational strategy and objectives. For this you will use

You have been assigned as a consultant to give your expertise on a failing portfolio which is critical to the success of your client's organization. You are now in the process of reviewing the portfolio management plan. What do you expect to see as part of this plan?

Assume you are the portfolio manager for a legacy software company. For many years, your company was one of the top five leaders in software development, but as newer and more efficient 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 computing 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:

Your CEO was fired because of a decline in the company's profits by the Board of Directors. They have now hired a new CEO, who plans to re-shape the portfolio and has changed the company's strategic goals and objectives. The new CEO will continue the existing product line of soap products that the company has manufactured for the past 50 years but now will manufacture new products to focus on the baby boomer generation as they retire but desire to maintain a youthful appearance. It also will offer other products to new high school and college graduates who want to appear older. As the portfolio manager you should:

One of the stakeholders of one of your components came to you complaining that his manager is not receiving specific information on multiple components progress. What is your best course of action?

The Portfolio Performance Management Plan is an important document that is referenced throughout the portfolio life cycle. Which of the following is correct regarding the Portfolio Performance Management Plan purpose and focus?

You are managing a complex portfolio with high risk levels due to emerging technological breakthroughs and a short benefit window to market your product. You know that managing risk is key to success and you are coaching your team on the same. For this you maintain a risk register. The risk register is used throughout the portfolio life cycle in order to track and manage risks. It is continually updated throughout the portfolio life cycle. As a portfolio manager, you know that the risk register includes all of the following except

When it comes to managing the portfolio value, one of the junior portfolio managers came to you asking about the relation between cost-benefit analysis and the efficient frontier analysis. What should your answer to her be?

When we talk about portfolios, programs and projects, it is inevitable to mention the business value which is the sum of tangible and intangible assets of an organization, also known as the net quantifiable benefit. When it comes to business value, at which level of the organization is the Business Value achieved?

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 components to be terminated as a competitor was first to market. The Portfolio Review Board usually meets daily in this fast-paced environment as it:

Along the course of the portfolio, you will be recommending the initiation, termination and update of components. The governance bodies will be approving or rejecting your recommendations as part of their role in the authorization of the portfolio. As a portfolio manager, which of the following, in your opinion, is the objective/purpose of the Authorize Portfolio Process?

Communication requirements are analyzed and documented in the portfolio communication management plan to be used by other processes as needed. Which of the processes use this information in order to provide accurate information in a timely manner?

After three months, you have a list of all the program, project, and ongoing work being done in your 500-person Division of your State Government Agency. With this list, the next step is to:

One of the major resources on your portfolio is needed by two of the components at the same time. This resource has high technical knowledge and is aware of all the business needs. Which of the following tools and techniques can you use in order to solve this issue?

Risk Management is integrated in all the other processes and process groups and is an integral recurrent activity throughout the portfolio life cycle. Which of the following is considered an external risk that can affect the portfolio?

You have been asked to manage a major portfolio in order to salvage the company and and re-align it with the strategic objectives and goals. You decided to develop the strategic documents and are currently developing the charter. As a portfolio manager, which of the following would be your answer when asked of the purpose for the development of portfolio charter?

Even though you do not work in an industry that is heavily regulated by your government, such as in new product development, health, or safety, recently your government issued a mandate that senior management of all corporations must certify the accuracy of reported financial statements to prevent any accounting fraud. These controls are to be implemented in the next fiscal year. This obviously is not in your portfolio strategic or management plans but is an example of a(n):

You are managing a portfolio linked to multiple business units and you set clear accountabilities from the beginning to avoid delays and to enhance the decision making process. Roles and Responsibilities are recorded in multiple portfolio documents. Where are the portfolio component managers roles and responsibilities stored?

You have scored the portfolio components and are analyzing the data in order to prioritize the components. Using the following scoring table, which of the options represents the correct Components Priority?

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Due to market technological changes, your company got impacted and was urged to revise its portfolios. You are currently revising your portfolio to determine the required changes in the component mix. Which of the following options is the means to the "to-be" vision?

Assume you are working in a division in your country's Department of Interior. The Department is set up in Bureaus, and your work falls within Natural Resources. Your division is the Water Resource Division. You are responsible as the portfolio manager for the work in this Division. As you work on the portfolio for the upcoming year, you point out to the members of the Portfolio Review Committee that:

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 company 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 information needs. You next decided to hold some one-on-one interviews with several interested and influential stakeholders in terms of communications requirements. From these interviews you are concerned that some stakeholder groups may be missing so you decided to:

Capability and capacity analysis are useful tools in portfolio performance management. In using this type of analysis a best practice is to:

You are managing a large portfolio and know that you will need to constantly show the progress and status of the portfolio in meeting. For this you have developed a robust roadmap using BI tools. The Portfolio Roadmap is an important document that is referenced throughout the portfolio life cycle. Which of the following is correct regarding the Portfolio Roadmap purpose and focus?

You are managing a large portfolio and are approaching to a major checkpoint. As a portfolio manager, you are now collecting information and reports from various components for aggregation and presentation. What method/tool can you use to support you in this process?

ecause your company's Portfolio Review Board consists of the Directors of its five business units and is chaired by the CEO, the meetings tend to be contentious as there is limited funding available to authorize all the proposed programs and projects. Dissension also is the norm if resources are reallocated from one business unit to another. As a result, the CEO:

As a portfolio manager you try to use all the information available to you in order to get the best out of the existing information and to better plan and manage the portfolio. The Enterprise Environmental Factors are important and referenced throughout the portfolio life cycle. Which of the following is correct regarding their purpose and focus?

While performing the manage supply and demand process, one of your sub-portfolio managers came to you asking advice on how to analyze intangible assets such as resources knowledge or skills based on the metrics defined. What should be your advice to him?

One of the major steps for a portfolio manager is to know which components qualify to be included in the mix of components that will achieve the strategic objectives sought by the portfolio. As a program manager, you will use a variety of methods to help you achieve this purpose. Which of the following are valid tools and techniques?