A portfolio manager is considering rebalancing the portfolio to improve overall performance. The portfolio currently has a high concentration of projects in a mature market with declining ROI, and a few projects in an emerging market with high growth potential but higher risk. The strategic objective is to balance risk and return. What is the most appropriate rebalancing approach?

Gradually reallocate a portion of resources from mature to emerging market projects to achieve a balanced mix.

Shift all resources from the mature market to the emerging market to maximize growth.

Maintain the current allocation because the mature market projects are stable.

Terminate all mature market projects and invest only in emerging market projects.

A portfolio manager notices that the portfolio's cost performance index (CPI) has been steadily decreasing over the last four quarters. What does this trend indicate?

The portfolio's schedule performance is improving

The portfolio is experiencing a favorable cost variance

The portfolio's cost efficiency is deteriorating over time

The portfolio is becoming more efficient in terms of cost

Which of the following is an example of a corrective action for a portfolio component that is over budget?

Terminating the component immediately

Reducing the scope of the component

Ignoring the variance until the next review

Increasing the component's budget without analysis

What is the primary goal of portfolio rebalancing?

To realign the portfolio with strategic objectives

To reduce the portfolio's risk to zero

To maximize the number of components in the portfolio

To eliminate all low-performing components

PMIPortfolio Management Professional (PfMP)

Domain 3Objective 2

Performance Analysis PFMP Practice Questions (Page 7)

Part of the Portfolio Performance 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 8–13 from this objective — we provide 34 practice questions to prepare you well beyond it. (estimate)

34questions here

7free pages

10concepts

25%of the exam

Questions 31–34

31expert · hard
A portfolio manager is considering rebalancing the portfolio to improve overall performance. The portfolio currently has a high concentration of projects in a mature market with declining ROI, and a few projects in an emerging market with high growth potential but higher risk. The strategic objective is to balance risk and return. What is the most appropriate rebalancing approach?
Select an answer first
32foundation · easy
A portfolio manager notices that the portfolio's cost performance index (CPI) has been steadily decreasing over the last four quarters. What does this trend indicate?
Select an answer first
33foundation · easy
Which of the following is an example of a corrective action for a portfolio component that is over budget?
Select an answer first
34foundation · easy
What is the primary goal of portfolio rebalancing?
Select an answer first

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