CCM Portfolio Management & Strategy 2

Question 1

Which portfolio balancing technique plots business units on a matrix using market growth rate and relative market share?

Accepted Answer

BCG Growth-Share Matrix

Answer

The BCG Growth-Share Matrix uses market growth rate and relative market share to categorize business units as Stars, Cash Cows, Question Marks, or Dogs.

Question 2

A portfolio manager notices that a product line generates high cash flow but operates in a low-growth market. In BCG terms, this is best described as a:

Accepted Answer

Cash Cow

Answer

A Cash Cow has high relative market share in a low-growth market, generating more cash than it consumes.

Question 3

In portfolio strategy, 'strategic fit' refers to:

Accepted Answer

The degree to which business units share resources or capabilities that create synergies

Answer

Strategic fit describes how well business units complement each other by sharing resources, capabilities, or market positions to create value.

Question 4

Which strategy involves a company expanding its portfolio by acquiring businesses in unrelated industries?

Accepted Answer

Conglomerate diversification

Answer

Conglomerate diversification involves entering entirely different industries, spreading risk but reducing strategic synergy.

Question 5

The primary purpose of portfolio-level risk management is to:

Accepted Answer

Optimize the aggregate risk-return profile across all business units

Answer

Portfolio-level risk management seeks to balance and optimize the combined risk-return profile rather than manage risks in isolation.

(CCM) Certified Commercial Manager Practice Test

(CCM) Certified Commercial Manager Practice Test

CCM Portfolio Management & Strategy 2