Following a major organizational restructuring, new portfolios are currently being initiated. You have been assigned the position of portfolio manager on one of the major portfolios and are currently

Question

Options

• AQualifies estimated costs and benefits and lists quantitative considerations of alternative portfolio
• BQuantifies estimated costs and benefits and lists qualitative considerations of alternative portfolio
• CQuantitative considerations of alternative portfolio components
• DQualifying estimated costs and benefits

• A
  4% (2)
• B
  91% (48)
• C
  2% (1)
• D
  4% (2)

Explanation

Cost-benefit analysis in portfolio management is a hybrid analytical technique: it quantifies (assigns numerical values to) the estimated costs and benefits of alternative portfolio components or scenarios, and it also documents qualitative considerations - factors that cannot easily be expressed in numbers but still influence decisions (e.g., strategic alignment, stakeholder impact, brand value). Option A reverses this - it says 'qualifies estimated costs' (which is not standard terminology) and 'lists quantitative considerations,' which is backwards. Option C addresses only quantitative aspects. Option D addresses only qualification/qualifying of costs. The correct approach, per the PMI Standard for Portfolio Management, combines quantification of costs/benefits with the documentation of qualitative factors - making option B the most complete and accurate description.

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