Question 1

Assume you are a member of your company's Portfolio Review Board. Your Board meets quarterly to determine which new components to undertake and selects them even if it means the portfolio then will require rebalancing. As you consider the proposed business case for a component and assess the suggestions of the other Board members, a key factor is:

Options :

A : The depth of the proposal in terms of identification of key benefits

B : Total available resources

C : Overall stakeholder interest

D : Component feasibility studies

Answer: B

Question 2

Risk Management is integrated in all the other processes and process groups and is an integral recurrent activity throughout the portfolio life cycle. Which of the following is considered an external risk that can affect the portfolio?

Options :

A : Technological Advancement

B : Corporate Strategies

C : Bankruptcy

D : Changing Priorities

Answer: A

Question 3

Working previously in the financial industry and studying finance and risk in graduate school, you are familiar

with Markowitz's Efficient Frontier theory. Now assume you are the portfolio manager for a state government

agency. Your agency has a reputation of being risk adverse but given recent budget cuts, you have convinced

your executive team it needs to pursue some new programs and projects to demonstrate its benefits to the state.

You decided to apply the Efficient Frontier concepts to show them the current state of its components in terms

of risk and associated costs. You explained the portfolio is efficient if it has:

Options :

A : A mix of components—from high risk/high return to low risk/low return

B :

The ability to quantify the value of risk in monetary terms

C :

The possible overall portfolio value with the greatest possible benefits

D :

The best possible expected level of return for its level of risk

Answer: D

Question 4

Working to best optimize resource supply and demand in your telecom company, authorized components are

prioritized to help in resource allocation. This means as you work to do so, you need to review the portfolio

because:

Options :

A :

It provides guidance in terms of recommendations if there are changes in strategy and resource

availability

B : Resource requirements are balanced according to the resource pool

C : Components are not authorized unless resources are available to support them

D : Sponsors assess resource requirements and their availability before proposing a component to be in the portfolio

Answer: B

Question 5

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:

Options :

A :

Visualize components

B : Frame the balancing problem

C : Provide scores as outputs

D : Focus on existing components

Answer: A

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