Task 4 PFMP Practice Questions (Page 5)

Questions 21–25

1. 21foundation · easy

   What is the main purpose of applying prioritization techniques to portfolio components?

   • ATo rank components based on their strategic fit and value
   • BTo eliminate all low-risk components from the portfolio
   • CTo create a detailed project plan for each component
   • DTo ensure that all components have equal funding
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2. 22foundation · easy

   When evaluating a portfolio component against strategic objectives, what is the primary question to answer?

   • ADoes this component have the lowest cost among all alternatives?
   • BDoes this component have the longest duration?
   • CDoes this component have the highest number of stakeholders?
   • DDoes this component contribute to achieving one or more strategic objectives?
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4. 23foundation · easy

   What should a portfolio manager do if monitoring reveals that a component is no longer aligned with strategic objectives?

   • AChange the strategic objectives to match the component
   • BIncrease the component's budget to improve alignment
   • CAdjust the portfolio by potentially replacing or terminating the component
   • DIgnore the misalignment and continue as planned
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5. 24application · medium

   A portfolio manager is preparing a quarterly report for the board of directors. The report needs to show how the portfolio is aligned with the corporate strategy. The board is particularly interested in the progress of strategic initiatives and any changes to the portfolio. What should the portfolio manager include in the report?

   • AA detailed financial analysis of each project's ROI.
   • BA summary of the portfolio's alignment with each strategic objective, including key performance indicators and any adjustments made.
   • CA status update on each project, including schedule and budget variances.
   • DA list of all projects and their budgets.
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6. 25expert · hard

   A portfolio manager is prioritizing projects for a financial services firm. The firm's strategy is to expand into new markets while maintaining regulatory compliance. Two projects are proposed: (1) a project to enter a new geographic market, and (2) a project to upgrade the compliance system. The market expansion project has high revenue potential but also high regulatory risk. The compliance upgrade has lower revenue potential but reduces regulatory risk. The firm has a moderate risk appetite. What should the portfolio manager do?

   • APrioritize both projects, but sequence them to manage risk, such as upgrading compliance before entering the new market.
   • BPrioritize the market expansion project because of its high revenue potential.
   • CReject both projects because they are too risky.
   • DPrioritize the compliance upgrade because it reduces risk.
   Reveal Solution Discussion Select an answer first