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PFMP · Question #648

PFMP Question #648: Real Exam Question with Answer & Explanation

The correct answer is B: The probability of achieving portfolio objectives. See the full explanation below for the reasoning.

Question

The members of your Portfolio Review Board and other key stakeholders tend to be risk adverse as the company has survived recent recessions and is profitable. However, in an upcoming meeting with the corporate Board of Directors, they have asked you to show the frequency of meeting certain cost objectives at various percent points. For example assume the portfolio is to meet a $41,000 target in the next month, to be 75% confident this will occur, a forecast of $50,000 is needed. This means you need to show:

Options

  • AThe needed contingency reserve
  • BThe probability of achieving portfolio objectives
  • CThe confidence of meeting success criteria
  • DThe values of KPIs with their confidence levels

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