PfMP Certification Portfolio Risk Management

Question 1

According to the PMI Standard for Portfolio Management, what is the primary purpose of portfolio risk management?

Accepted Answer

To optimize the portfolio's risk exposure in alignment with organizational risk appetite

Answer

To eliminate all risks associated with portfolio components

Answer

To document all potential threats and assign them to project managers

Answer

To avoid high-risk components and focus only on low-risk initiatives

Question 2

Which process in portfolio risk management involves examining and prioritizing risks based on their probability and impact on portfolio objectives?

Accepted Answer

Qualitative Risk Analysis

Answer

Risk Identification

Answer

Quantitative Risk Analysis

Answer

Risk Response Planning

Question 3

A portfolio manager discovers that several components share a common dependency on a single vendor. This situation represents which type of portfolio risk?

Accepted Answer

Concentration risk

Answer

Residual risk

Answer

Secondary risk

Answer

Trigger risk

Question 4

What is the primary difference between a risk at the portfolio level versus a risk at the project level?

Accepted Answer

Portfolio risks affect strategic objectives and multiple components, not just a single initiative

Answer

Portfolio risks always have higher probability of occurrence

Answer

Portfolio risks are managed exclusively by the PMO, not the portfolio manager

Answer

Portfolio risks are only financial in nature

Question 5

Which risk response strategy involves shifting the negative impact of a risk to a third party?

Accepted Answer

Transfer

Answer

Avoid

Answer

Mitigate

Answer

Accept

Question 6

In portfolio risk management, what does 'risk appetite' refer to?

Accepted Answer

The level and types of risk an organization is willing to pursue in order to achieve its objectives

Answer

The maximum financial loss an organization can absorb in a single quarter

Answer

The number of high-risk components allowed in the portfolio at any given time

Answer

The threshold at which a risk must be escalated to the executive committee

Question 7

A portfolio manager wants to understand the overall effect of uncertainty on portfolio objectives. Which technique is most appropriate?

Accepted Answer

Monte Carlo simulation

Answer

SWOT analysis

Answer

Delphi technique

Answer

Brainstorming