Task 4 PFMP Practice Questions (Page 6)

Questions 26–28

1. 26expert · hard

   A portfolio manager is prioritizing projects for a healthcare organization. The organization's strategic goals are to improve patient outcomes, reduce costs, and expand telemedicine services. Three projects are proposed: (1) a new electronic health record (EHR) system, (2) a telemedicine platform, and (3) a cost-reduction initiative. The organization has a limited budget and a strict regulatory environment. Using a scoring model, the EHR system scores highest on strategic fit, but the telemedicine platform has the highest potential for revenue growth. The cost-reduction initiative has the lowest strategic fit but the highest ROI. What should the portfolio manager do?

   • APrioritize the cost-reduction initiative because it has the highest ROI.
   • BPrioritize the telemedicine platform because it has the highest revenue potential.
   • CUse a multi-criteria scoring model that includes strategic fit, revenue potential, ROI, and regulatory impact to rank the projects.
   • DPrioritize the EHR system because it has the highest strategic fit score.
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2. 27application · medium

   A portfolio manager is evaluating a proposed project to implement a new customer relationship management (CRM) system. The company's strategy is to improve customer retention and increase cross-selling opportunities. The CRM system is expected to improve customer data management and enable better targeting. However, the project requires significant investment and IT resources. What should the portfolio manager do?

   • AEvaluate the project's alignment with strategic objectives, its expected benefits, and its resource requirements before making a decision.
   • BApprove the project but reduce its scope to lower the cost.
   • CApprove the project because it directly supports the customer retention strategy.
   • DReject the project because it is too expensive.
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3. 28expert · hard

   A portfolio manager is balancing a portfolio for a retail company. The portfolio currently has a mix of projects: some are short-term, low-risk projects that generate quick wins, and others are long-term, high-risk projects that could transform the business. The company's strategy is to achieve both short-term profitability and long-term innovation. The board has set a risk appetite that limits the total portfolio risk. The portfolio manager has received a new project proposal that is highly innovative but also very risky. What should the portfolio manager do?

   • AReject the new project because it is too risky.
   • BAdd the new project to the portfolio because it aligns with the innovation goal.
   • CEvaluate the new project's risk and return, and if it fits within the risk appetite, add it; otherwise, adjust the portfolio mix to accommodate it.
   • DReplace a short-term, low-risk project with the new project to maintain the total number of projects.
   Reveal Solution Discussion Select an answer first