Be Able to Identify, Analyse and Distinguish Between Appropriate and Inappropriate Application of Portfolio Definition Practices and Techniques to a Scenario MOP-FOUNDATION Practice Questions (Page 6)

Questions 26–30

1. 26foundation · easy

   An organization categorizes its portfolio by assigning each initiative to a category based on the department that proposed it, without considering the initiative's strategic contribution. Why is this categorization inappropriate?

   • AIt is inappropriate because departments should not be involved in portfolio definition
   • BIt does not reflect the strategic value or nature of the initiatives, which is the purpose of categorization
   • CIt is inappropriate because it uses too many categories
   • DIt is appropriate because department-based categorization is the only valid method
   Reveal Solution Discussion Select an answer first
2. 27expert · hard

   A software company has prioritized its portfolio and is balancing it. The portfolio office has decided to fund all initiatives that scored above 70 in the prioritization model, regardless of their category or risk profile. The result is that the portfolio contains only 'Growth' initiatives, all with high risk, and no 'Operational excellence' or 'Risk and compliance' initiatives. The portfolio office argues that the scores were objective and the portfolio is therefore balanced. Why is this argument INAPPROPRIATE?

   • AA portfolio that contains only one category and only high-risk initiatives is not balanced, regardless of the scores
   • BThe portfolio should have funded only the highest-scoring initiative
   • CThe portfolio should have excluded all high-risk initiatives
   • DThe prioritization scores should have been adjusted to include other categories
   Reveal Solution Discussion Select an answer first
4. 28application · medium

   An insurance firm has completed the prioritization and balancing of its portfolio. The portfolio office is now preparing the portfolio strategy and delivery plan. They have documented the strategic objectives, the list of approved initiatives with budgets, and the expected benefits. They now plan to publish the document and begin implementation. Which additional element is MOST important to include before the plan is complete?

   • AThe full business case for every approved initiative
   • BThe dependencies and resource capacity across the approved initiatives
   • CThe names of all project team members
   • DThe detailed project schedules for each initiative
   Reveal Solution Discussion Select an answer first
5. 29foundation · easy

   A portfolio manager prioritizes initiatives by ranking them according to the order in which they were submitted, without considering strategic importance. Why is this prioritization approach inappropriate?

   • AIt does not reflect the relative importance of initiatives, which is the basis for prioritization
   • BIt is inappropriate because it uses too many criteria
   • CIt is inappropriate because prioritization should be done by the finance department only
   • DIt is appropriate because submission order is a fair and unbiased method
   Reveal Solution Discussion Select an answer first
6. 30expert · hard

   A pharmaceutical company is prioritizing its portfolio. It has scored initiatives on strategic fit, financial return, and risk, and has produced a ranked list. The portfolio office has noticed that the top-ranked initiative is a high-risk research project, while several lower-ranked initiatives are low-risk and deliver steady returns. The portfolio office proposes to select the top 10 by score without further adjustment. Which consideration makes this approach INAPPROPRIATE?

   • AThe top-ranked initiative should be removed because it is too risky
   • BPrioritization by score alone does not account for the need to balance risk and return across the portfolio
   • CThe risk score should have been excluded from the prioritization
   • DThe lower-ranked initiatives should have been scored higher on financial return
   Reveal Solution Discussion Select an answer first