[2021] PfMP PDF Questions - Perfect Prospect To Go With VCEEngine Practice Exam
PMI PfMP Pdf Questions - Outstanding Practice To your Exam
NEW QUESTION 87
Following an organizational change and restructuring. One of the Portfolio Key Stakeholders got a promotion and became a director. She became less interested in your portfolio and you used to engage her very closely.
What is your best course of action in this case?
- A. Escalate the issue to the steering committee in order to solve the issue from a management perspective
- B. Meet with the stakeholder and analyze her requirements again
- C. This is a normal scenario in a given portfolio; you should continue work as normal
- D. Move her to the third quadrant (high influence, low interest)
Answer: D
NEW QUESTION 88
With the increasing use of drywall, your company, which has been in the plaster business for over three generations, is finding it harder to maintain a share of the market and to achieve a positive return on its investments. Three years ago, the corporate executives implemented a portfolio process, and they serve as the Portfolio Governance Council. They meet monthly, and after each meeting, you prepare a report of their decisions. This report is:
- A. Is used to analyze the effects of their decisions on the company's portfolio
- B. Distributed only to the Governance Council to serve as a record of their meetings
- C. Is used to authorize the portfolio
- D. Sent to all employees in the company as it focuses on employee empowerment and involvement
Answer: C
NEW QUESTION 89
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 incorporated in all process groups as well. As a portfolio manager, how do you map the risk management elements to process groups?
- A. Risk Assessment (Defining) - Risk Planning (Aligning) - Risk Response (Authorizing & Controlling)
- B. Risk Planning (Defining) - Risk Assessment (Planning) - Risk Response (Authorizing & Controlling)
- C. Risk Planning (Defining) - Risk Assessment & Response (Aligning)
- D. Risk Planning (Defining) - Risk Assessment (Aligning) - Risk Response (Authorizing & Controlling)
Answer: D
Explanation:
Explanation
This is a tricky question, however the risk management is embedded in all of the portfolio management processes.
NEW QUESTION 90
As a portfolio manager, you have been reporting the progress, status and performance regularly and you have been doing a good job so far. Reports are the primary documents to communicate portfolio status and be able to balance the mix of portfolio components to best align with objectives. When it comes to optimizing a portfolio, how can risk reports be used?
- A. To be able to define the organization risk tolerance and update the Strategic Plan accordingly
- B. To be able to analyze occurred risks and cancel any component who has an increased risk
- C. To know about major risks and occurred issues in relation with the portfolio components
- D. To assess achieved value and the confidence level in it
Answer: C
Explanation:
Explanation
Confidence level is not needed for already achieved values; risk tolerance is not relevant in the context of optimization nor the strategic plan is updated as part of this process; components with increased risks do not need to be canceled for as long as they are required or the risk tolerance is not in jeopardy. In this scenario, risk reports are used to know about major risks and occurred issues in relation with the portfolio components
NEW QUESTION 91
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?
- A. Continue working on the component as you have the support of one of the senior managers
- B. Highlight the issue in the governance board meeting and recommend termination based on facts and thorough analysis
- C. Ask the senior manager directly for resources as you know that this component requires additional resources
- D. Ask the steering committee for more resources in order to be able to continue with this component
Answer: B
Explanation:
Explanation
As a portfolio manager, it is your responsibility to highlight the issues that might affect the success of the portfolio, and present a detailed analysis to the governance board for review and decision; all other options are not ethically correct
NEW QUESTION 92
You are the manager for a governmental portfolio aiming to restructure the roads in your country. Having a large number of stakeholders including the public, 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 expected to be found in this plan?
- A. Communication objectives
- B. Portfolio structure including a listing of the various portfolio components and other work
- C. Introduction (goals, objectives, strategies, and tactics)
- D. Organization areas and organization structure
Answer: A
NEW QUESTION 93
Assume you are working to ensure your organization has a balanced portfolio. You have decided to use a bubble diagram and have set it up to show the components in terms of: ease of execution [difficult or easy] and component importance [high or low]. In such an approach, bubbles are used to:
- A. Provide scores as outputs
- B. Visualize components
- C. Frame the balancing problem
- D. Focus on existing components
Answer: B
NEW QUESTION 94
One of the key stakeholders came to you asking you to add more metrics because she thinks that it would give the portfolio management a better view of the actual progress. For her the more metrics you have the better.
What should your opinion be regarding this?
- A. You should disagree and escalate this to the governance board
- B. You should disagree and communicate a clear message to the stakeholder that it does not matter how many metrics you have as long as you can fully report the progress
- C. You should agree as having more metrics is better and because you do not want to say no to a key stakeholder
- D. You should agree, as having more metrics is better
Answer: B
NEW QUESTION 95
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:
- A. Often uses a Delphi approach
- B. Uses multi-voting and makes the final decision
- C. Strives to use consensus to make decisions, but this approach rarely is effective
- D. Decided to use an outside facilitator when meetings are held
Answer: D
NEW QUESTION 96
Along your portfolio lifecycle, you have been conducting multiple review meetings to ensure continuation from one phase to another and to ensure the alignment and value delivery, in addition to communicating decisions and valuable information to the related stakeholders. When it comes to decisions and actions taken by the governance board as a result of these meetings, they are communicated through
- A. Portfolio Management Plan Updates
- B. Portfolio Process Assets Updates
- C. Portfolio Updates
- D. Portfolio Reports
Answer: D
NEW QUESTION 97
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. When it comes to Managing portfolio risks, a risk owner, along with the portfolio manager, should select the strategy or mix of strategies most likely to be effective. Which of the following is not a risk strategy?
- A. Fallback Plan
- B. Response Strategy Selection
- C. Scenario Analysis
- D. Strategies for both threats and opportunities
Answer: A
NEW QUESTION 98
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 Stakeholders Analysis?
- A. Communication Strategy matrix
- B. Elicitation technique
- C. Communication Matrix
- D. All of the options
Answer: B
NEW QUESTION 99
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. Multiple risks have already been spotted in your portfolio and you are now identifying, assessing and developing risk response plans for them, in addition to monitoring and controlling them. What are you looking for? You were finding this hard at first however you asked the help from a senior portfolio manager and he redirected you to use
- A. Weighted Ranking and scoring techniques, Graphical Analytical Methods, Quantitative & Qualitative Analysis
- B. Capability & Capacity, Weighted Ranking and scoring techniques, Graphical Analytical methods, Quantitative & Qualitative Analysis
- C. Weighted Ranking and scoring techniques, Quantitative & Qualitative Analysis
- D. Weighted Ranking and scoring techniques, Portfolio Component inventory, Categorization
Answer: C
Explanation:
Explanation
This question relates to the tools and techniques of the "Manage Portfolio Risk" process. The answer to this question is Weighted Ranking and scoring techniques, Quantitative & Qualitative Analysis
NEW QUESTION 100
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. You are currently assessing risk against multiple criteria and classifying them as part of developing the risk management plan. Which of the below reflects what you are doing?
- A. Quantitative and Qualitative analysis
- B. Weighted Ranking and Scoring Techniques
- C. Categorizing Risks
- D. Graphical Analytical methods
Answer: B
Explanation:
Explanation
The scenario points to the weighted ranking and scoring techniques which help assessing risk against multiple criteria
NEW QUESTION 101
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 abundantly throughout the portfolio lifecycle and spans multiple processes.
While performing the capability and capacity analysis during the manage supply and demand process, which of the following you use to maximize the use of resources
- A. Soft Booking
- B. Continuous monitoring of the progress
- C. Equity Protection
- D. Allocating scarce resources
Answer: A
Explanation:
Explanation
In order to maximize the use of resources, organizations will commit resources to authorized portfolio components, based on the expected end date of an active portfolio component commonly referred to as "soft booking"
NEW QUESTION 102
Your company has decided to invest in a revolutionary product that will make the delivery of online orders easier and will cut down the delivery time by no less than 35%. While measuring the value of the new component with relation to the market, which of the following should be used?
- A. Market Requirement Analysis
- B. Weighted Ranking and Scoring
- C. Cost-Benefit
- D. Comparative Advantage Analysis
Answer: D
NEW QUESTION 103
Stakeholders are concerned about the purpose of optimizing a portfolio while already having defined the portfolio with its related components, and are worried that this will cause a lot of time to be wasted. What is your advice to the stakeholders?
- A. This process can be skipped because it will be re-done as part of the Optimize Portfolio process
- B. This process is required to optimize and balance the portfolio for performance and value delivery
- C. They are right, the process can be skipped when an inventory of work is in place
- D. This process is required to produce an organized portfolio for ongoing evaluation, selection, and prioritization
Answer: B
Explanation:
Explanation
The purpose of the Define Portfolio process is to create an up-to-date list of qualified portfolio components by identifying, categorizing, scoring, and ranking portfolio components. This process is required to produce an organized portfolio for ongoing evaluation, selection, and prioritization. On the other hand, the purpose of Optimize Portfolio process is to optimize and balance the portfolio for performance and value delivery, which is the correct answer in our case
NEW QUESTION 104
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. In which of the Portfolio management processes the efficient frontier is mostly used
- A. Manage Supply & Demand
- B. Optimize Portfolio
- C. Manage Portfolio Information
- D. Manage Portfolio value
Answer: D
Explanation:
Explanation
This is a tricky question. You should note here that the efficient frontier main purpose is to get the highest return for a given/acceptable level of risk. The Efficient Frontier is a method used in Value Scoring and Measurement Analysis in the "Manage Portfolio Value" process
NEW QUESTION 105
Consider you are a veteran portfolio manager and that you are managing the most important portfolio in your company. What are the processes you execute as part of the portfolio governance?
- A. Portfolio Management Plan and Portfolio Strategic Plan
- B. Define Portfolio and Authorize Portfolio
- C. Portfolio Performance Management and Portfolio Communication Management
- D. Define Portfolio and Optimize Portfolio
Answer: D
Explanation:
Explanation
This is a tricky question that a lot of people have contradicting opinions on it. However the correct answer is Define Portfolio and Optimize Portfolio. The wording here plays a role and it is believed that this question is one of the 20 pre-flight questions that PMI include in the exam. Three of the options for this question tend to be correct: 1- Define Portfolio and Authorize Portfolio: here the answer is not valid because the Authorize Portfolio part is executed by the Governance Board, the Portfolio Manager in this case just recommends changes. 2- Portfolio Performance Management and Portfolio Communication Management: if you come to think of it, Performance Management is used to get numbers and data in order to take a decision, and communication management is used to disseminate the decision; however, question clearly states as part of the governance process and not linked to or supporting the governance process. As a portfolio manager, the Define Portfolio and Optimize Portfolio are both your responsibility to execute
NEW QUESTION 106
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?
- A. Governance Recommendations
- B. None of the options
- C. Updates in resources, risks/issues, value/benefits, performance, and financials
- D. Feedback report to organizational strategy planning
Answer: B
Explanation:
Explanation
Portfolio Reports include: Performance reports, including scorecards and dashboards; Feedback report to organizational strategy planning; Variance reports, Resource capacity and capability reports, resource utilization and resource efficiency; Funding allocated to Pf elements; Variances, analysis of the variances, and recommendations to be considered by the governing body; Portfolio risks and issues; Governance recommendations; Governance decisions; Portfolio component recommendations; Updates in resources, risks/issues, value/benefits, performance, and financials
NEW QUESTION 107
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 effect of changing one or more factors?
- A. Trade-Off Analysis
- B. Market Payoff variability
- C. Performance variability
- D. Budget Variability
Answer: A
NEW QUESTION 108
The governance role in oversight is abundant during planning in order to agree on multiple roles and responsibilities including those of a portfolio manager. The agreements are recorded in the meeting minutes and included as updates to
- A. Portfolio
- B. Portfolio Process Assets
- C. Portfolio Reports
- D. Portfolio Management Plan
Answer: B
NEW QUESTION 109
You have just finalized aggregating value from the ongoing components to present a consolidated report to the governance board, in addition to recommending changes to portfolio and information to enable a better decision making. You are now looking for a place to document updates including new measures, reports and processes for effective ongoing management of the portfolio value. In which of the following documents are these measures included?
- A. Portfolio Process Assets updates
- B. Portfolio Reports
- C. Portfolio Management Plan updates
- D. Portfolio updates
Answer: C
Explanation:
Explanation
Let us first position ourselves, Page 96 - 6.3 define the Process for "Manage Portfolio Value" as the one depicted in this scenario. In addition, the scenario states that you have finalized this process, so we are looking at an output that documents the new measures, reports, etc.
New measures, reports and processes for effective ongoing management of the portfolio value are part of the portfolio performance management plan which is a subsidiary plan of the portfolio management plan, and which is updated as a result of the process in question
NEW QUESTION 110
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