PfMP Portfolio Management Professional (PfMP) Questions and Answers

Being a portfolio manager, you realize that defining value differs among organizations based on the type of organization and its strategic goals and objectives. However, you know a value measurement framework is helpful as it:

Assume it was your suggestion to the executive team as the newly appointed Chief Financial Officer for your organization to implement portfolio management. While someone has been identified to be the portfolio manager, you are developing the charter and the structure. In doing so, guidance is provided by the:

Efficiency is highly regarded when managing a portfolio and spans all activities i.e. risk management, communication management, etc. A portfolio is considered efficient if it

While defining the portfolio, the portfolio manager uses a set of evaluation criteria in order to generate a list of portfolio components for optimization and balancing. Which of the following is not an evaluation criteria?

In managing strategic change, the portfolio manager performs stakeholder analysis in order to consider the changing requirements. One of the key stakeholders expressed concerns about the lack of recognition of the value contribution of his department. The portfolio manager is not convinced with the level of value contribution. Which of the following is considered the best approach to take?

Programs and projects in your company, one of the largest banks in the world, are required to submit metrics as to their individual progress each month. To simplify the collection and reporting process, you held interviews with members of the Portfolio Review Board to see their areas of greatest interest and also with program and project managers to determine how difficult it would be to collect the data. You then selected 10 possible metrics to the Board, with a goal that five would be regularly reported. It is important to note that:

You have been asked to manage a major portfolio in order to salvage the company and and re-align it with the strategic objectives and goals. You decided to develop the strategic documents and are currently developing the charter. As a portfolio manager, which of the following would be your answer when asked of the purpose for the development of portfolio charter?

Due to strategic changes, one of the sub-portfolios in your portfolio has been decided to be canceled because it no longer meets the new market demands. What is your next step as a portfolio manager?

A portfolio manager needs to continuously balance the need and requirements with the available resources and needs to maintain a balanced portfolio and portfolio resources in order to optimize delivery. Capability and Capacity analysis is performed in 4 of the portfolio management processes and it serves a slightly different purpose in each and every one of them. You are currently using it in the development of your charter. What is its purpose in this case?

You are the portfolio manager for a large county that comprises much of a major city in your country. The city also has a portfolio manager, and often you meet to discuss proposed initiatives to see if there are any dependencies. In your county, you established an approach to evaluate portfolio components to make judgments regarding their alignment and priority. In doing so, which of the following was especially helpful:

Along the course of the portfolio, you will be recommending the initiation, termination and update of components. The governance bodies will be approving or rejecting your recommendations as part of their role in the authorization of the portfolio. As a portfolio manager, which of the following, in your opinion, is the objective/purpose of the Authorize Portfolio Process?

Assume your automotive company is new to formal portfolio management. It has had for years a strategic plan and tries to be first to market for new and improved features on its vehicles each model year. You were hired as the portfolio manager to provide a more disciplined approach for determining new products to pursue as well as existing ones that should be terminated. So far, you have set up an approach, established categories for the various components, and determined a method to rank and score new proposals for consideration. Now you are working to set up practices to follow to optimize the portfolio. In doing so, it is important to note that:

Your company has had a portfolio management process in place for five years at the enterprise level, in its business units, and even in its complex programs. This year the company's Center for Excellence received an award for its work in this area from PMI®. As the Portfolio Manager, you have predefined metrics in place, which are critical because:

Optimizing the portfolio is a major recurring process that the portfolio manager performs throughout the portfolio life cycle in order to balance the mix of portfolio components. During this process, the portfolio manager uses a number of graphical analytical methods to help him ease the process. Which of the following is not a graphical analytical method used in this process?

Portfolios tend to have over or under allocations if the portfolio management is of low maturity. Which tool will help you analyze the resources over and under allocations?

You have just finished a major checkpoint in your portfolio and the portfolio has to undergo several changes in order to re-align with the strategies. One component of your portfolio has been cancelled and the resources are going to be reallocated to other components. Which process does these activities?

While managing portfolio value, you met with stakeholders and discussed how to address the strengths and weaknesses in order to ensure benefits are comprehensively and holistically taken into consideration. Which of the following tools and techniques are you performing?

A junior Portfolio manager has come to you for advice. He is hearing a lot about the definition of portfolio management, however, he is not sure anymore of the exact one. What do you, as an experienced portfolio manager tell him?

Calculate the composite index for the following portfolio having CPI weight = 80% and SPI weight = 20%

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While managing the portfolio value, it is important to know the different roles of responsibilities and accountabilities for the actual benefits realization in order to be able to aggregate the correct value from different components; in which document are these roles and responsibilities mentioned?

The audit department has found out that two of the departments have conflicting standards and have asked you to analyze and compare them in order to be able to take a decision which could impact the portfolio alignment. Which analysis will you use to compare conflicting standards in different departments

Your organization conducted an OPM3 assessment focusing on its best practices in portfolio management and also on those that were needed. The OPM3 Certified Professional felt greater attention was needed managing strategic change. This means:

During one of the review meetings, the governance board asked to know the progress with relation to benefits of one of the major programs in your portfolio; in this case you will advise the program manager to present

comes to this type of organizations, which of the following statements is true?

When developing the charter, you will use multiple inputs and documents of which the portfolio Strategic Plan is one. How is the strategic plan used in this case?

Assume your company is a leading producer of AA and AAA batteries. However, it is a competitive market, and customers desire batteries with a longer life and a smaller size so they will not require replacement. As you set up categories for portfolio components, you will continue to produce your current product line as well as pursue advanced products to meet customer needs. A useful component category, therefore, is:

As part of the portfolio communication management, multiple documents are prepared in order to effectively manage communications. The Stakeholder matrix is one of the prepared documents, what does it include?

You are managing a portfolio for your company and are trying to balance the tasks that will be done internally based on the availability and the ones that will be outsourced. Managing supply and demand is a recurring activity in the portfolio life cycle and results in changes in resource utilization and resource efficiency. Which of the following are considered inputs to the Manage Supply and Demand process?

Your online ordering company wants to add a component to its portfolio that its sponsor believes will outdistance the competition, but it has risks and also will be subject to regulatory approval. The purpose is to use parachutes to deliver the merchandise ordered through small helicopters so the recipients receive their orders within three hours of the on line purchase. As the portfolio manager you recognize this component is a major change and will require resources if it is approved. You are now performing change management using a change structure that:

Portfolio Reports are widely used as inputs and outputs to multiple processes throughout the Portfolio Life Cycle. Which of the following is NOT part of portfolio reports?

While Optimizing your portfolio, you need to present to the governance board how your components will be ranked and balanced in a quantifiable way. How will you do this?

Moving from project management to program management and now being appointed as the first portfolio manager in your cyber warfare company, you know you always wondered what happened to the various reports you had to prepare, and the metrics you had to collect. You are working now to determine critical metrics for portfolio management and decided to involve as many people as possible through questionnaires and surveys. You also held some focus groups. The purpose is to:

You are managing a complex portfolio with high risk levels due to emerging technological breakthroughs and a short benefit window to market your product. You know that managing risk is key to success and you continuously report risks and issues to stakeholders. One of the key stakeholders is furious as he cannot find an issue that has occurred a week ago in the risk register. What should you do in this case?

Assume you are the portfolio manager for a legacy software company. For many years, your company was one of the top five leaders in software development, but as newer and more efficient software was invented, it began to lose market share. Your company then found its services were needed as legacy systems were converted, especially since Cloud computing now is so popular. But it has lost revenues increasingly over the years. To gain market share and provide greater portfolio value, the executive team decided it should:

Different types of risks affect the portfolio, and they may be positive or negative. As the portfolio manager, one has to maximize the opportunities and minimize the threats. An example of a negative portfolio risk is:

Portfolios include a lot of work and as a portfolio manager you need to keep an eye on the value realization while maintaining the strategic alignment. You are currently in the process of monitoring the portfolio to ensure alignment with organizational strategy and objectives and make governance decisions. What do you expect as an outcome to this?

Organizations pass by a strategic planning cycle on regular basis in order to align existing strategies, remove strategies and add new ones. When it comes to the implementation, which of the following options represents the activities through which the organizational strategies are implemented?

Working to monitor the portfolio especially in terms of its value to the organization, you had each component manager prepare monthly variance reports. Of the components ranked in the top 10, six of them realized they would not require some of their initial funding and still would be completed as planned. This means:

Establishing a portfolio management process starts with the development of the organizational portfolio management implementation plan. Which of the following helps while developing this plan?

One of your component managers has submitted his resignation and left the company; a new program manager joins the portfolio replacing him. Which document you use to inform the new program manager about his responsibilities in the portfolio?

Portfolios include a lot of work and as a portfolio manager you need to keep an eye on the value realization while maintaining the strategic alignment. You are currently aggregating value delivered by the portfolio components. What can you use to help you in this context?

You have just finished the development of the Portfolio Communication Management Plan. The portfolio team is looking for portfolio value assessment, status reports, and portfolio forecast with variance to plan. Where should they find this information?

Working as a portfolio manager in the Water Resources Department of the U.S. Geological Survey, you are following a scorecard approach to report progress to your executives on the components in your portfolio. You submit the scorecards monthly, and based on their results, your executives decide if a Portfolio Review Board meeting should be held. Your emphasis in these reports is to:

Processes in the portfolio management layer interact with each others. For example, Manage Portfolio Information interacts with Provide Portfolio Oversight in order to store decisions made during the portfolio review meetings. Where are these decisions stored?

Portfolio Governance is important in a portfolio to maintain correct alignment, monitor and control performance and status, reshuffle the mix of components as found necessary, etc. Governance management includes which of the following processes?

While defining the portfolio, a portfolio manager does a preliminary comparison of all inventoried portfolio components against the portfolio component definition. For this, the descriptors of each portfolio component are used in order to compare it to other components. Which of the following is not a component key descriptors?

A portfolio manager on one of the major sub-portfolios in your portfolio has tendered his resignation and gave you a 2 months notice. This unexpected change will require you to take immediate action with the governance board. Which of the following processes will be handling this situation?

Portfolio Prioritization Model is included in the Portfolio management plan and guides the ongoing decisions as to which portfolio components should be added, terminated, or changed; which of the following is correct regarding the Prioritization Model purpose and content?

As you grow older, you gain more experience and things that once seemed hard to assimilate, can become very easy. One junior member of your portfolio management team is confused on the relationship between the Optimize, Authorize and Provide Oversight processes. What could your advice to him be?

A number of components proposals are on the table as a result of the strategic planning cycle. While defining the portfolio, you wanted to make a preliminary screening of the proposed components in order to filter them based on the acceptance criteria. Which of the following techniques you use?

While defining the portfolio mix, the portfolio manager performs a categorization of the portfolio components based on multiple categorization criteria. Which of the following is considered as a portfolio component category?

Two functional managers within your portfolio are arguing about one scarce resource, and each one is claiming that the resource should be assigned to them. What should you do as a portfolio manager in order to solve this issue?

Working to prepare the portfolio performance management plan, assume you have been involving others in the process to help secure their later support of the plan. You also reviewed historical information and other artifacts. Not to be overlooked is a/an:

In order to guide the work and correctly manage the portfolio, one of the major documents to be prepared is the Portfolio Management Plan acting as guideline for portfolio management. What are the tools and techniques you could use while developing this plan?

While aggregating data from component reports in order to present the portfolio status to the governance board on an upcoming review meeting, which of the following is the most important thing to do?

You want to ensure that the Portfolio Review Board is able to make key decisions at each meeting. As the portfolio manager, you and your staff are responsible for scheduling the meetings, providing the agenda, taking minutes, tracking open issues, and documenting and communicating decisions that are made to key stakeholders. Before each meeting, you feel it is a best practice to:

As the portfolio manager, you must engage stakeholders and build and maintain outstanding relationships with them as much as possible. After identifying and classifying them, you want to make sure you provide the specific information each stakeholder group requires. Therefore you prepare:

The Portfolio Performance Management Plan is an important document that is referenced throughout the portfolio life cycle. Which of the following is correct regarding the Portfolio Performance Management Plan purpose and focus?

Assume you are the portfolio manager for a company that specializes in software, including portfolio management software. It has many components under way to enhance the existing product line but also to move the company into Cloud computing. You regularly prepare reports on the portfolio status but lately have had a large number of stakeholders request ad hoc reports. You decided to survey your stakeholders to learn about their information needs. You next decided to hold some one-on-one interviews with several interested and influential stakeholders in terms of communications requirements. From these interviews you are concerned that some stakeholder groups may be missing so you decided to:

In managing strategic change, the portfolio manager performs stakeholder analysis in order to consider the changing requirements. Which of the following options is referenced in this case to provide guidance on the communication required to ensure successful change?

You have been assigned as a consultant to give your expertise on a failing portfolio which is critical to the success of your client's organization. You are now in the process of reviewing the portfolio management plan. What do you expect to see as part of this plan?

You are managing a complex portfolio with high risk levels due to emerging technological breakthroughs and a short benefit window to market your product. The Portfolio Process Assets are important and referenced throughout the portfolio life cycle. Which of the following is correct regarding the Portfolio Process Assets purpose and focus?

You are working diligently to ensure people throughout the organization realize the importance of portfolio management. To do so, you are preparing a communications strategy. When you distribute it, you will be able to show you can satisfy information requirements in order to:

One key artifact to review as the portfolio communications management plan is prepared is the:

As part of the portfolio communication management, multiple documents are prepared in order to effectively manage communications. The Communication Calendar is one of the prepared documents, what does it include?

You are managing a complex portfolio with high risk levels due to emerging technological breakthroughs and a short benefit window to market your product. You know that managing risk is key to success and you are coaching your team on the same. The Portfolio Risk Management Plan is an important document that is referenced throughout the portfolio life cycle. Which of the following is correct regarding its purpose and focus?

For years, your aerospace company has been a leader in the development of sophisticated avionic hardware systems around the world. The executives want to continue with this well-recognized product line, but also they decided it is time to move into state-of-the art software to complement the hardware products. You have been asked to assess whether there are skill set limitations in the company to assess resource capacity internally. To do so, you decide to:

As the Director of Human Resources, you were pleased to be asked to join the Portfolio Steering Committee in your organization as you feel you can contribute given the scarce subject matter experts as your company begins to enter a new market in children's toys rather than its main focus on video games and apps. Children's toys will represent a new portfolio in the company. However, while you will concentrate primarily on the resource allocation issue as you work to determine the types of projects and programs to pursue, it is important as well to recognize that:

Due to multiple occurrences of risk realization, the CEO has asked you to re-assess the portfolio risks once again. Up to what level in the organization do you go when you need to assess risks?

Due to market technological changes, your company got impacted and was urged to revise its portfolios. You are currently revising your portfolio to determine the required changes in the component mix. Which of the following options helps in assessing the capability of the organization to undertake the portfolio with its new strategic direction, and what is needed to be done?

One of your team members who is particularly interested in becoming a portfolio manager has asked you what is the relation between the Portfolio roadmap and the Programs/Projects roadmaps? What should be your answer to him?