An organization balances its portfolio by selecting only initiatives that are low-risk and have short payback periods, rejecting all higher-risk opportunities. Why is this balancing approach inappropriate?

It is appropriate because minimizing risk is the only goal of balancing

It is inappropriate because balancing should focus on long payback periods only

It may exclude initiatives that are strategically important but carry higher risk, leading to a portfolio that underdelivers on strategic objectives

It is inappropriate because low-risk initiatives are always the best choice

MoP Foundation

Domain 5Objective 4

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 8)

Part of the Portfolio definition cycle domain, which makes up ~26% of our current practice bank. PeopleCert does not publish an official question count, but from its 40-minute exam (~15–25 total, ~4–7 in this domain), expect 1–2 from this objective — we provide 36 practice questions to prepare you well beyond it. (estimate)

36questions here

8free pages

10concepts

10 Concepts in This Objective

Appropriate application of understanding the current portfolio
Inappropriate application of understanding the current portfolio
Appropriate application of categorizing the portfolio
Inappropriate application of categorizing the portfolio
Appropriate application of prioritizing the portfolio
Inappropriate application of prioritizing the portfolio
Appropriate application of balancing the portfolio
Inappropriate application of balancing the portfolio
Appropriate application of completing a portfolio strategy and delivery plan
Inappropriate application of completing a portfolio strategy and delivery plan

Questions 36–36

36foundation · easy
An organization balances its portfolio by selecting only initiatives that are low-risk and have short payback periods, rejecting all higher-risk opportunities. Why is this balancing approach inappropriate?
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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 8)

Questions 36–36

An organization balances its portfolio by selecting only initiatives that are low-risk and have short payback periods, rejecting all higher-risk opportunities. Why is this balancing approach inappropriate?

Keep studying — Portfolio definition cycle