Task 6 PFMP Practice Questions (Page 1)

Questions 1–5

1. 1application · medium

   A regional bank's portfolio includes a legacy core-banking modernization project, a new mobile app, a regulatory compliance initiative, and an experimental blockchain pilot. The CEO has just announced a revised strategy focused on 'digital customer experience' as the top priority. The portfolio manager must re-evaluate the components. Which action best reflects applying strategic alignment in this situation?

   • AScore each component against the new strategic theme and adjust the portfolio's component mix and priorities accordingly.
   • BFreeze all non-digital components to protect resources for the new mobile app initiative.
   • CAsk the CEO to clarify whether the blockchain pilot is still considered strategic before making any changes.
   • DContinue with the current portfolio since it was approved at the last governance review.
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2. 2application · medium

   A manufacturing company is evaluating two potential projects for its portfolio. Project Alpha reduces production costs by 15% but does not directly support the new 'smart factory' strategy. Project Beta enables IoT-based predictive maintenance, directly supporting the 'smart factory' strategy, but has a higher implementation cost and a longer payback period. The portfolio has limited capital. What should the portfolio manager do?

   • ASelect Project Beta because strategic alignment is a primary criterion, and explore ways to manage its higher cost and longer payback.
   • BSelect both projects by reallocating resources from other non-strategic components.
   • CReject both projects because neither fully meets both strategic and financial criteria.
   • DSelect Project Alpha because cost reduction provides immediate financial benefit and frees up capital.
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4. 3application · medium

   A portfolio manager is prioritizing components for the upcoming fiscal year. The organization's strategy emphasizes 'market expansion in Asia'. The portfolio includes: (1) a project to localize the product for Japanese users, (2) a project to upgrade the company's internal ERP system, (3) a project to enhance the existing North American website, and (4) a mandatory data privacy compliance project. How should the portfolio manager prioritize these components?

   • APrioritize the ERP upgrade first because it improves internal efficiency, which supports all other projects.
   • BPrioritize the website enhancement first because it generates immediate revenue from the existing market.
   • CPrioritize the Japan localization project first, followed by the compliance project, then the ERP upgrade and website enhancement.
   • DPrioritize the compliance project first because it is mandatory, then the Japan localization, ERP, and website projects.
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5. 4foundation · easy

   Which of the following best describes the role of strategic alignment in portfolio management?

   • AIt ensures that all portfolio components are completed on time and within budget
   • BIt ensures that the portfolio is balanced across different risk levels
   • CIt ensures that the organization's strategy is updated to reflect the portfolio's performance
   • DIt ensures that portfolio components are aligned with the organization's strategic objectives
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6. 5application · medium

   Mid-year, a portfolio manager notices that a major project, initially aligned with the 'cost leadership' strategy, is now consuming 30% more budget than planned and its expected cost savings have decreased. Meanwhile, the organization's strategy has shifted towards 'product differentiation'. What should the portfolio manager do?

   • ARecommend terminating or descoping the project and reallocating its budget to projects aligned with 'product differentiation'.
   • BContinue the project as planned because it was approved at the start of the year.
   • CIncrease the project's budget to help it achieve its original cost-saving goals.
   • DWait until the end of the year to evaluate the project's performance against the original plan.
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