Portfolio Management Professional (PfMP) Certification PfMP Study Guide

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Choose to be a Portfolio Management Professional (PfMP) certified to signify your advanced competency in the coordinated management of one or more portfolios to achieve strategic objectives. PfMP study guide from ITExamShop are great with the actual exam questions to help you achieve the PfMP certified. There are 495 practice exam questions and answers totally in PfMP pdf file. Come to ITExamShop to instant download PfMP pdf file to learn all the questions and answers then complete Portfolio Management Professional (PfMP) certification exam.

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1. Assume you are the portfolio manager for your pork producing company, the market leader in your country. Over time, the industry has recovered from trichinosis as a risk. Your company has added new components to its portfolio, and many have been to demonstrate to the public that its products are safe. It implemented the Agriculture Department's and Food and Drug Administration's Hazard Analysis and Critical Control Point (HACCP) regulations and is enhancing its image as 'the other white meat'. However, now the entire industry is faced with a new epidemic known as porcine epidemic virus, which is affecting pigs in 22 different states, and profits have decreased significantly. New components now must be added to the portfolio.

This situation shows:

Resource re-allocation is required

Risk management is essential

The ROI of the new components must be determined

Portfolio rebalancing has led to the new components being in the top five priority list

2. Managing risk is key to the success of any initiative. Risk is considered to be inherent in any activity we do in project management and at any level. Risk is part of project, program and portfolio management and has a different exposure in each and every one .

Which of the following highlights this difference?

Project and Programs risks are combined in order to develop the portfolio risk register as an aggregation of both

Risks at project and programs level can be eliminated, but not at portfolio level

Portfolio risks are inter-components risks, while program and project risks are not

Project and Program risks are risks within the boundaries of the project or program, while portfolio risks can span the organizational level

3. 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?

Stakeholders quadrants showing the level of interest and influence

Stakeholders roles, interests, expectations and groups

Intended recipients, communication vehicles, frequency and communication areas

Representation of all of the communication for the portfolio and their frequency over a period of time

4. 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?

Integration of Subsidiary Plans, Organizational Structure Analysis, Elicitation techniques

Capability & Capacity Analysis, Weighted Ranking and scoring techniques, Graphical Analytical Methods, Quantitative & Qualitative Analysis, PMIS

Capability & Capacity Analysis, Weighted Ranking and scoring techniques, Graphical Analytical Methods, Quantitative & Qualitative Analysis

Weighted Ranking and scoring techniques, Portfolio Component inventory, Categorization

5. Your company got recently acquired by another company and the strategic directions which your portfolio is based on have been changed .

Which document do you, as a portfolio manager, update to reflect the change to the timeline?

Communication Management Plan

Portfolio Management Plan

Portfolio Strategic Plan

Portfolio Roadmap

6. ecause your company's Portfolio Review Board consists of the Directors of its five business units and is chaired by the CEO, the meetings tend to be contentious as there is limited funding available to authorize all the proposed programs and projects. Dissension also is the norm if resources are reallocated from one business unit to another.

As a result, the CEO:

Strives to use consensus to make decisions, but this approach rarely is effective

Decided to use an outside facilitator when meetings are held

Uses multi-voting and makes the final decision

Often uses a Delphi approach

7. In your portfolio some of the programs and projects that are being pursued will realize benefits throughout the program and project's life cycle, while others will not realize the benefits until the program or project is closed or years later.

This means as the portfolio manager, you should:

Prepare a portfolio benefit realization plan

Set up KPIs to document progress in benefit realization

Include portfolio benefits, results, and expected value in the portfolio strategic plan

Distribute regular reports on benefit realization as part of the portfolio communications management strategy

8. You are the portfolio management for a big corporate with existence in 3 continents.

While planning the performance management and in particular the dashboards and reporting tools, which of the following options is the most important to account for the different geographical locations?

Organizational Process Assets

Portfolio Process Assets

Enterprise Environmental Factors (EEFs)

A good sponsor to back you up

9. 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 risks is key to success, and you are coaching your team on the same. While planning for risk management, multiple investment choice tools are used as part of the quantitative and qualitative analyzes .

Which of the following tools determines the effects of portfolio velocity?

Budget Variability

Market Payoff variability

Time-To-Market Variability

Trade-Off Analysis

10. You are managing a portfolio in a functional organization and resources are shared between operations and projects. You are continuously performing capability and capacity analysis in order to optimize the portfolio .

Which of the following capability and capacity analysis is used to limit the number OR size of components the organization can execute?

Knowledge Basis

Financial

Human Resources

Assets

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11. A portfolio manager needs to continuously balance the need and requirements with the available resources to maintain a balanced portfolio and portfolio resources in order to optimize delivery, in addition to managing communication, risk, etc. For this you develop a robust Portfolio Management Plan .

Which of the below is not a part of this plan?

Change Control and Management

Portfolio Communication Management Plan

Portfolio Strategic Plan

Portfolio Performance Management Plan

12. Over the years, your organization has grown significantly as it has entered new markets while maintaining its presence in its traditional product line of security systems. The company now has eight different business units rather than three, which was the case only two years ago, and it set up funding originally such that it was only allocated to one business unit and could not be transferred to others. At the recently held Portfolio Oversight Committee meeting, five business units did not add components, but some were completed. The other three added a number of programs and projects, which were authorized. Now funding for these new components is an issue.

This means:

Another Committee meeting is required to focus on the funding problem

The sponsors of the newly authorized components need to work with their business units to determine how funds will be allocated

The three business units need to evaluate their portfolios and recommend termination of some components to the Committee

Changes are required as to how funds are allocated

13. As you are the portfolio manager for your state government agency, which is undergoing a series of budget cuts, you are focusing attention on managing risks to the portfolio as the budget is reduced. You realize in this process the time and budget for risk management also will be reduced; these data are in the:

Portfolio performance plan

Portfolio strategic plan

Portfolio management plan

Portfolio financial plan

14. Based on the data in the following table, your organization should pursue which component:

Component 5

Component 3

Component 2

Component 1

15. Working as the portfolio manager for your business unit of a major aerospace organization means you have a variety of programs, projects, and operational activities under way.

You have set up a number of reports on the progress of the portfolio for your various stakeholders, but the best approach is to monitor the progress of the portfolio against:

Organizational strategy

Organizational goals

Specific key performance indicators for the business unit

Organizational critical success factors

16. A problem related to internal corruption has occurred in your company. The CEO has setup a new management team and had to do budget cuts until the situation is stabilized. Your portfolio is highly affected by this budget cut and you were obliged to cancel a few components .

What is your best course of action in this case?

Cancel the components that are not performing well

Do not cancel components; and request additional budget from the management

Prioritize components and assign the available resources to them

Raise the issue to the sponsor so he can get you additional resources

17. As part of the Portfolio Communication, the Portfolio Manager analyzes the raw data assimilated from the portfolio process assets and from the stakeholder analysis. This analysis aims to isolate the data that hold value to the receiving audience .

Which tool can the portfolio manager use to help him in performing this analysis?

Communication Methods

Elicitation

Stakeholder Analysis

Communication Requirements Analysis

18. 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:

The criteria to optimize the portfolio may be the same as that used in the scoring model

A portfolio management information system should be set up

Future investment requirements are a key criterion to consider

Compliance with organizational standards cannot be overlooked

19. You are the portfolio manager in a large organization including a diversity of stakeholders.

From the start, you knew the importance of correctly managing the stakeholders requirements and concerns and you grouped them in order to

Group stakeholders as internal and external

Facilitate stakeholders identification

Group stakeholders from the same functional area

Group stakeholders having same concerns and interests

20. 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?

A proficient management team commitment to the effort

All of the options

A planned approach to change organizational behavior that includes a balance of strong leadership and management

A planned approach for incrementally developing and implementing portfolio management processes

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21. 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?

Program Business Case

Portfolio Roadmap

Portfolio Management Plan

Portfolio Charter

22. You are managing a large portfolio and know that you will need to constantly show the progress and status of the portfolio in meeting. For this you have developed a robust roadmap using BI tools. The portfolio roadmap is used abundantly as an input to 7 processes.

When it comes to managing portfolio value, how is the portfolio roadmap used?

Delays in delivery of portfolio component results may adversely affect the value derived from the portfolio

It is not used in managing the portfolio value

Dependencies shown at the roadmap level have negative impacts on the value realized

Dependencies shown at the roadmap level have positive impacts on the value realized

23. Assume before you prepared your portfolio management plan for your company that you did some benchmarking and learned that if you used elicitation techniques it was useful in the portfolio development stage and before there were significant scope changes because of strategy changes to the portfolio. You decided to involve the Portfolio Review Board members, other key stakeholders, and some subject matter experts in this process and then decided to poll input from the group as a majority vote.

This meant you were using:

Collaboration techniques

Facilitation techniques

Interviews and observations

Negotiation techniques

24. While managing a program for the banking sector spanning multiple transformational areas. A new portfolio manager comes to you seeking advice on the usefulness of ROI.

You tell her that ROI is the best method to measure returns of

Short Duration and High Risk

Long Duration and High Risk

Short Duration and Low Risk

Long Duration and Low Risk

25. Assume you work for a technology company that is publically owned, and the value of its stock is tracked daily by the CFO and is reported to the portfolio manager. Quarterly meetings are held with stockholders as the company went public through an Initial public offering (IPO) last year.

These stockholders:

Have different communications requirements than other stakeholders

Typically receive information as to the portfolio health before each meeting

Want to attend all Portfolio Review Board meetings

Are considered external stakeholders

26. You have been assigned as the manager for a major transformation portfolio in your company. You have a new direction in sight and you need to work with the team to attain the end goal and achieve the expected strategy. You are currently in the middle of developing the strategic plan and require the following inputs

Organizational Strategy & Objectives, Enterprise Environmental Factors, Roadmap

Organizational Strategy & Objectives, Enterprise Environmental Factors, Organizational Process Assets, Portfolio Process Assets, Inventory Of Work

Organizational Strategy & Objectives, Enterprise Environmental Factors, Roadmap, Portfolio Management Plan

Organizational Strategy & Objectives, Enterprise Environmental Factors, Portfolio, Portfolio Management Plan

27. Your IT company has been successful as it is able to deliver projects on time without the need for rework and within the allocated budget. Your customers have been astonished with the results and are using your company for additional work, plus they have been recommending your company to others. Your company is experiencing tremendous growth and wants to ensure it can take on the new work with existing resources, both people and systems, or whether it will need to use outsourcing. Given its outstanding reputation, your executives wish to avoid the need to outsource. You have been asked to perform a capacity analysis.

A best practice is to:

Prepare a model of the current configuration and modify it to determine future capacity requirements

Determine and document existing assumptions

Inventory staff members to assess their level of competencies and existing workload

Use resource leveling in an enterprise project management information system

28. 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?

Technology capabilities and capacities

Costs

Benefits, financial and non-financial

Customer

29. You are in the process of planning the portfolio for a major client and wanted to put an extra effort on planning for managing the performance as the portfolio has a lot of technical aspects and correct performance management is key to success .

What tools and techniques can you use for this purpose?

Elicitation techniques, Value Scoring & Measurement Analysis, Benefits Realization Analysis

Elicitation techniques, Capability & Capacity Analysis, PMIS

Scenario Analysis, Capability & Capacity Analysis, Quantitative & Qualitative

Elicitation techniques, Communication Requirements Analysis, Stakeholder analysis

30. Assume you are putting together for the Portfolio Review Board several options for

consideration of potential components and current components. You are using an approach with different probabilities to determine outcomes and EMV .

Which of the following would you recommend realizing Components A and B are new, while C and D are in progress:

Component A

Component B

Component C

Component D

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31. As part of developing the Communication Management Plan, a portfolio manager executes the Communication Requirements Analysis, in addition to Stakeholders Analysis .

Which of the following options in your opinion is a result of the Communication Requirements Analysis?

Stakeholder matrix

Communication Matrix

All of the options

Communication Strategy matrix

32. Assume you are helping the Portfolio Review Board select and implement the portfolio with the best alignment to strategy as you work to create a list for to be considered for prioritization. One possible component on the surface does not seem to be one that is profitable, but you believe that over time changes will occur that will make it cost/beneficial to pursue.

This means you are using:

Market analysis

Business value analysis

Scenario analysis

Options analysis

33. Assume you are co-owner of a small consulting firm. Previously, you worked as a managing partner in one of the larger consulting firms in your country that had a defined portfolio management process to determine key opportunities to pursue to focus not solely on proposal win ratio but to aggressively emphasize capture ratio.

Now in your new company in terms of portfolio management, the best practice to follow is to:

Work with your business partner in terms of portfolio management

Have your Board of Directors serve as a Portfolio Review Board

Involve your business partner plus the firm's subject matter experts in portfolio decisions

Set up an independent group of advisors to meet quarterly as a Portfolio Review Board

34. You are managing a big portfolio and have a lot of stakeholders, whether external or internal. You know that stakeholder engagement is crucial to the success of the portfolio and realize that in order to have proper stakeholders engagement you will need to

Update your communication management plan

Develop a well-structured RACI matrix

Engage regularly with key stakeholders through formal and informal communication means

Meet regularly with all stakeholders

35. Portfolio managers tend to use the efficient frontier analysis as a modeling approach that

gives decision makers the analytical tool to optimize portfolios given resource constraints such as risk.

Consider that your company is risk-averse, on which side of the efficient frontier curve should the undertaken portfolios lie?

Below the curve

Along the lower bounds of the curve

Above the curve

Along the upper bounds of the curve

36. 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. For this, you are always on the lookout to optimize your portfolio .

What can you use to start this process?

Roadmap, Portfolio Management Plan, Portfolio, Portfolio Reports, Enterprise Environmental Factors

Roadmap, Portfolio Management Plan, Portfolio, Portfolio Reports, Portfolio Process Assets

Roadmap, Portfolio Management Plan, Portfolio, Portfolio Reports, Portfolio Organizational Process Assets

Roadmap, Portfolio Strategic Plan, Portfolio, Portfolio Reports, Portfolio Process Assets

37. Your company is currently on the verge of bankruptcy due to the lack of transparency within the organization; this alerted the CEO to take decisive actions and request that new reporting lines be established in order to be fully transparent. The new reporting lines triggered changes in roles & responsibilities for managing communication and communication policies & constraints.

Where are these changes reflected when it relates to your portfolio?

Portfolio Process Assets updates

Portfolio Updates

Portfolio Management Plan updates

Organizational Process Assets updates

38. During a portfolio review meeting, the steering committee has decided on the inclusion of a new project to re-align the portfolio with its strategic objectives, what do you do before and after the meeting?

Update the decision; write the Minutes Of Meeting

Change request; communicate the decision to all stakeholders in the portfolio

Write the Minutes Of Meeting; update the decision

Change request; communicate the decision to related stakeholders listed in the communication management plan

39. 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 below helps in optimizing the supply and demand?

Minimize both the unused capacity and the unmet demands

Maximize both the unused capacity and the unmet demands

Maximize the unused capacity and minimize the unmet demands

Minimize the unused capacity and maximize the unmet demands

40. You have been asked to be the manager for a governmental portfolio, and your starting point should be tendering a strategic plan to the board for validation and approval for continuation .

Which documents/artifacts do you have debuting the portfolio that you can use to develop the strategic plan?

Prioritization analysis, portfolio process assets, portfolio roadmap

EEF’s, portfolio component inventory, organizational process assets

Organizational strategy and objectives, inventory of work, portfolio process assets

Portfolio charter, portfolio roadmap, organizational strategy and objectives

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41. In preparing your communications matrix, you identified five communication areas. One is portfolio governance decisions.

A communication vehicle for these decisions is:

E-mails

Scorecards

Internal portal

PMO repository

42. Values assist in guiding actions, evaluations, and decisions. Assume your organization is considering entering into a consortium to produce a heliumcontrolled car. Once the helium is supplied, additional amounts will not be needed. The car is to be personally appealing with a focus on an inexpensive cost to increase marketability. The consortium will enable each firm to capitalize on the expertise of the other firms in it, but the customer will view it as a separate entity. If your organization enters into the consortium, it must justify the value to the portfolio of doing so.

In addition to ensure benefits are realized a focus is needed on:

Organizational value

Sustainable value

Managerial value

Employee value

43. 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. One of your team members came to you asking about the order of the steps used to perform risk management activities .

What should be your answer to him?

Risk Identification, Risk Assessment, Response Planning, Risk Response

Risk Planning, Risk Assessment, Risk Response

Response Planning, Risk Identification, Risk Assessment, Risk Response

Risk Identification, Response Planning, Risk Assessment, Risk Response

44. 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?

Accept the statement as it is a key stakeholder and the portfolio manager should remain in good contact with him

Reject the statement

Assign an owner to follow up on this concern and take a decision accordingly

This is a key stakeholder and his expectations and requirements should be taken into consideration for further analysis

45. Obviously resources are more than people and include physical resources and those at the organizational level, such as the knowledge management system, helpful in portfolio management in terms of competitive intelligence. However, since most organizations operate with scarce resources, it is necessary to apply these scarce resources to support the highest ranked items in the portfolio and not to fund a proposed component unless resources are available to support it. Therefore, it is useful to determine at a collective level whether or not resources will create value greater than the cost of creating it.

A portfolio report can focus on:

Allocation of resources according to a Responsible, Accountable, Consulted, Inform (RACI) chart

The need for drum resources and buffers to plan for their use at key times

Capability and capacity

Costs to acquire resources with needed knowledge, skills, and competencies

46. As a result of optimization, one of the components was deemed necessary to be terminated. One of the executive managers found about this and called you telling you that you should leave this component as it is of interest to her and she wants to see it finalized and that she will make resources available to it if needed .

What should be your best course of action?

Ask the steering committee for more resources in order to be able to continue with this component

Ask the senior manager directly for resources as you know that this component requires additional resources

Highlight the issue in the governance board meeting and recommend termination based on facts and thorough analysis

Continue working on the component as you have the support of one of the senior managers

47. When you are a portfolio manager, you need to do and re-do multiple processes in order to maintain the portfolio alignment to the changing strategies .

Which of the following are considered outputs to the Develop Charter process?

Portfolio Strategic Plan updates, Portfolio Charter, Portfolio Roadmap Updates

Portfolio Strategic Plan updates, Portfolio Charter, Portfolio Process Assets updates

Portfolio Strategic Plan updates, Portfolio Charter, Portfolio Management Plan Updates

Portfolio Strategic Plan updates, Portfolio Charter, Portfolio Reports

48. The interest, influence, and communication needs of business operational stakeholders who are looking to ensure alignment between portfolio components, while minimizing negative impact and maximizing positive benefits of all portfolio-managed changes to their business operations, relate to which type of stakeholders?

Internal and External Stakeholders

External Stakeholders

Does not relate to stakeholders

Internal Stakeholders

49. As a portfolio manager you visit and re-do the Optimize Portfolio process continuously .

Which of the following, in your opinion, is the objective/purpose of the Optimize Portfolio Process?

Balance the portfolio for performance and value delivery

Make Governance Decisions

Create an up-to-date list of qualified portfolio component

Allocating resources to develop component proposals or execute portfolio components

50. The company's management is not happy with the bared risk for the expected Portfolio value return and has reached a subject matter expert to try to re-align the risk level with the management expectations. The expert stated that it is preferable to diversify the portfolio components in order to get more results. In that case, you

Disagree with the expert because the company should have came to you before reaching an outside-party

Disagree with the expert because diversification will bring more complexity, thus more risks

Agree with the expert because he is the expert and you should abide by his recommendations

Agree with the expert because diversification in a portfolio may allow for the same portfolio expected return with reduced risk

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51. You have been managing multiple portfolios in your company for the past two decades and all deliveries were successful. A new portfolio manager is struggling and came to you for advice on the portfolio process groups. He knows that portfolio process groups are the base of portfolio management. While you explain to him about them, you told him that portfolio process groups are independent of

Business and Strategic Objectives

Application Areas and Industry Focus

Budget

Human Resources

52. 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?

Portfolio Components

Portfolio Strategic Management

Portfolio Components and Ongoing Operations

Ongoing Operations

53. You have been recently assigned to manage a new portfolio that is supposed to shift the company from silo-based to a projectized one. You are in the process of initiating the portfolio. You are currently developing the strategic plan. Upon finishing it, you are expected to present

Portfolio Strategic Plan and Portfolio Process Assets updates

Portfolio Strategic Plan and Portfolio

Portfolio Strategic Plan

Portfolio Strategic Plan and Inventory of Work

54. You have already created portfolio scenarios (what-if analysis) by reviewing components against prioritization criteria and using analysis techniques (e.g., options analysis, risk analysis, SWOT analysis, financial analysis). You now want to recommend portfolio scenario(s) and related components, based on prioritization analysis/criteria. You are doing this in order to

Provide a guiding framework to operationalize the organizational strategic goals and objectives

Evaluate and select viable options

Create a basis for decision making

Provide governance with a rationale for decision making

55. You are the manager for a governmental portfolio aiming to restructure the roads in your country. Having a tight schedule, a large number of stakeholders including the public, in addition to a strict budgeting framework, you know that you will be managing the communication closely and that the governance board and the stakeholders would want to check on the progress and performance frequently. For this you have developed a robust Communication management plan .

What is the result of developing this plan?

Portfolio Process Assets updates, Portfolio Charter updates, Portfolio updates, Portfolio Management Plan updates, Enterprise Environmental Factors updates

Portfolio Process Assets updates, Portfolio Charter updates, Portfolio Reports updates, Portfolio Management Plan updates, Portfolio Component Reports updates

Portfolio Process Assets updates, Portfolio Management Plan updates

Portfolio Process Assets updates, Portfolio Roadmap updates, Portfolio updates, Portfolio Management Plan updates, Enterprise Environmental Factors updates

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Portfolio Management Professional (PfMP) Certification PfMP Study Guide

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