Task 3 PFMP Practice Questions (Page 4)

Questions 16–20

1. 16expert · hard

   A technology company has a portfolio with three strategic themes: 'Innovation', 'Operational Excellence', and 'Market Expansion'. The portfolio manager must optimize the portfolio under a budget constraint. The following components are proposed: A) A high-risk, high-reward R&D project aligned with Innovation. B) A low-risk, cost-saving project aligned with Operational Excellence. C) A market entry project aligned with Market Expansion but with high regulatory risk. D) A maintenance project that keeps existing systems running but has no strategic alignment. The company's risk appetite is moderate, and the CEO wants to see progress in all three themes. Which portfolio composition best balances strategic alignment and risk?

   • AFund A, B, and C, and defer D, while monitoring risk and adjusting if needed.
   • BFund all four components to ensure operational stability and strategic progress.
   • CFund B and C only, and defer A and D, to balance risk and market expansion.
   • DFund A and B only, and defer C and D, to avoid regulatory risk.
   Reveal Solution Discussion Select an answer first
2. 17application · medium

   A government agency's portfolio includes a mix of IT and infrastructure projects. The strategic plan calls for 'improving citizen digital services.' The portfolio manager has established a quarterly alignment review. During the review, the manager notices that a legacy system upgrade project has drifted from its original scope and now includes significant non-digital components. What should the portfolio manager do first?

   • AReassess the project's alignment with the strategic objective and recommend scope adjustments or removal if it no longer contributes.
   • BReport the issue to the executive sponsor and ask them to decide without further analysis.
   • CApprove the scope change because the project is already underway and changing it would cause delays.
   • DImmediately cancel the project to prevent further misalignment and reallocate the budget to other digital projects.
   Reveal Solution Discussion Select an answer first
4. 18application · medium

   A portfolio manager is presenting the annual portfolio to the board. The board asks, 'How does this portfolio support our strategy to expand into emerging markets?' The portfolio currently includes projects in product localization, supply chain optimization, and a domestic marketing campaign. What should the portfolio manager do to best answer the board's question?

   • AShow how each component maps to the emerging markets strategy, and identify any gaps or misalignments.
   • BPresent the financial returns of each project to show the portfolio's value.
   • CExplain that the portfolio is balanced and that all projects are important for the company's growth.
   • DState that the domestic marketing campaign is a prerequisite for future international expansion.
   Reveal Solution Discussion Select an answer first
5. 19application · medium

   A manufacturing company's portfolio includes several components. The strategic objective is 'Reduce production downtime by 20%.' The portfolio currently has: a predictive maintenance system (high alignment, high cost), a new employee training program (medium alignment, low cost), a marketing campaign for a new product line (low alignment, medium cost), and a regulatory compliance upgrade (low alignment, mandatory). The portfolio manager must optimize the portfolio to maximize strategic alignment while respecting a fixed budget. Which action should the portfolio manager take?

   • AKeep the predictive maintenance system and the training program, and defer the marketing campaign; keep the compliance upgrade because it is mandatory.
   • BReplace the predictive maintenance system with a cheaper, less aligned alternative to free up budget for the marketing campaign.
   • CFund the predictive maintenance system and the marketing campaign, and cancel the training program and the compliance upgrade to save costs.
   • DFund all components because they all contribute to the company's overall success in some way.
   Reveal Solution Discussion Select an answer first
6. 20foundation · easy

   What is the purpose of assessing the alignment of portfolio components with organizational strategy?

   • ATo calculate the exact financial return of each component.
   • BTo determine which components should be included, continued, or removed from the portfolio.
   • CTo assign project managers to components.
   • DTo create a detailed project schedule for each component.
   Reveal Solution Discussion Select an answer first