A portfolio manager has selected a portfolio that includes a high-risk, high-reward project and several low-risk, steady projects. The CEO is concerned about the high-risk project. What is the most effective way for the portfolio manager to communicate this decision?

Promise that the high-risk project will be closely monitored and will be terminated if it shows signs of failure.

Explain that the high-risk project is essential for achieving a key strategic objective that cannot be met otherwise.

Focus on the low-risk projects and avoid discussing the high-risk one in detail.

Acknowledge the risk and agree to remove the project if the CEO is uncomfortable.

What is a key characteristic of portfolio components?

They are quantifiable and can be measured, prioritized, and managed as a group

They are always independent of each other and have no interdependencies

They are always temporary and have a defined start and end date

They are typically operational tasks that are repeated on a regular basis

What is the purpose of balancing portfolio components?

To ensure that all components have the same priority

To reduce the number of components in the portfolio

To ensure that all components are completed at the same time

To optimize the overall alignment and value of the portfolio

When prioritizing portfolio components, what is the primary basis for prioritization?

The size of the component's budget

The number of stakeholders involved

The degree to which each component supports strategic objectives

Which of the following is an example of balancing portfolio components?

Ensuring that all components are funded at the same level

Adjusting the mix of high-risk and low-risk components to achieve a desired risk profile

Eliminating all components that have any risk

Assigning the same project manager to all components

PMIPortfolio Management Professional (PfMP)

Domain 1Objective 2

Task 2 PFMP Practice Questions (Page 6)

Part of the Strategic Alignment domain, which accounts for 25% of the PFMP exam. PMI does not publish an official question count, but from its 240-minute exam (~95–160 total, ~24–40 in this domain), expect 3–5 from this objective — we provide 33 practice questions to prepare you well beyond it. (estimate)

33questions here

7free pages

10concepts

25%of the exam

Questions 26–30

26application · medium
A portfolio manager has selected a portfolio that includes a high-risk, high-reward project and several low-risk, steady projects. The CEO is concerned about the high-risk project. What is the most effective way for the portfolio manager to communicate this decision?
Select an answer first
27foundation · easy
What is a key characteristic of portfolio components?
Select an answer first
28foundation · easy
What is the purpose of balancing portfolio components?
Select an answer first
29foundation · easy
When prioritizing portfolio components, what is the primary basis for prioritization?
Select an answer first
30foundation · easy
Which of the following is an example of balancing portfolio components?
Select an answer first

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