Question 1

The efficient frontier in project management is the set of portfolio options that offer:

Accepted Answer

A)  A minimum return for a minimum risk. 
B)  A minimum return for a maximum risk. 
C)  A maximum return for a minimum risk. 
D)  A maximum return for a maximum risk.

Question 2

Project portfolio management is typically NOT used to balance:

Accepted Answer

A)  Human and technical resources. 
B)  Risk and return. 
C)  Efficiently run projects and nonperformers. 
D)  Various families of projects.

Question 3

Net present value is being used to break the tie among four otherwise equal projects. If the interest rate is 4%, which of these anticipated four-year flows would yield the greatest net present value?

Accepted Answer

A)  $10,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $13,000 in year 4 
B)  $13,000 in year 1; $12,000 in year 2; $11,000 in year 3; and $10,000 in year 4 
C)  $10,000 in year 1; $10,000 in year 2; $13,000 in year 3; and $13,000 in year 4 
D)  $11,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $12,000 in year 4

Question 4

Choose any example from recent news media and explain why their project failed.

Accepted Answer

The answer of Choose any example from recent news media...

Question 5

A project manager is using a simple scoring model to decide which of four projects is best, given the company's limited resources. The criteria, importance weights, and scores for each are shown in the table. Which project should be chosen?

Accepted Answer

A)  Project Greenlight 
B)  Project Runway 
C)  Project X 
D)  Project Ilevomit

Question 6

A writer estimates it will take three months to generate spiffy documents to accompany a seminal work in operations management. He grossly underestimates the time required and misses his deadline by two months. This estimate was:

Accepted Answer

A)  Objective and accurate. 
B)  Subjective and accurate. 
C)  Objective and inaccurate. 
D)  Subjective and inaccurate.

Question 7

A project that is exceptionally risky might still be undertaken by a firm if they have several other projects underway that are considered more of a sure thing. This approach to project selection is BEST described by the criterion called:

Accepted Answer

A)  Strategic "fit." 
B)  Risk. 
C)  Desire for portfolio balance. 
D)  Top management pressure.

Question 8

Which of these is NOT a factor in successful project portfolio management?

Accepted Answer

A)  Flexible structure and freedom of communication 
B)  Low-cost environmental setting 
C)  Emphasis on quality 
D)  Time-paced transition

Question 9

A wedding planner allows $10,000 for flowers and three weeks to receive all RSVPs back from the list of 700 guests. Both estimates are correct within a fraction of a percent. We could describe this factoid as:

Accepted Answer

A)  Numeric and subjective. 
B)  Numeric and objective. 
C)  Non-numeric and subjective. 
D)  Non-numeric and objective.

Question 10

What is the time value of money principle and how does it apply to project selection?

Accepted Answer

The answer of What is the time value of money...

Question 11

How does a checklist project screening model work?

Accepted Answer

The answer of How does a checklist project screening model...

Question 12

The profile model plots a graph on a(n):

Accepted Answer

A)  Perception-reality pair of axes. 
B)  Risk-return pair of axes. 
C)  Efficiency-effectiveness pair of axes. 
D)  Saxon-Norman pair of axes.

Question 13

An effective project selection model must reflect organizational objectives, including a firm's strategic goals and mission.

Accepted Answer

A) True 
 B)False

Question 14

Numeric project selection models, by their very nature, employ objective values.

Accepted Answer

A) True 
 B)False

Question 15

A selection model that is broad enough to be applied to multiple projects has the benefit of:

Accepted Answer

A)  Ease of use. 
B)  Comparability. 
C)  Capability. 
D)  Flexibility.

Question 16

The Analytical Hierarchy Process is used to decide among three projects that we'll call A, B, and C. The total score for project A is .650, for project B is .514, and for project C is .321. Which of the following statements is BEST?

Accepted Answer

A)  Project A is twice as good as project C. 
B)  The analysis must be incorrect because the total scores should sum to 1.00. 
C)  The analysis must be incorrect because there are two total scores that exceed 0.50. 
D)  The analysis must be incorrect because project C's total score is odd.

Question 17

A simple scoring model for project evaluation requires:

Accepted Answer

A)  Importance weights from 1 to 10 assigned to each criterion. 
B)  Score values assigned to each criterion in terms of its rating. 
C)  A division of weights by scores to arrive at a standardized score for each criterion. 
D)  A summation for each criterion to achieve an overall criterion score.

Question 18

Which statement regarding project selection is BEST?

Accepted Answer

A)  Organizational reality can be perfectly captured by most decision-making models. 
B)  Before selecting any project, the team should identify all the relevant issues that play a role in project selection. 
C)  Decision models must contain either objective or subjective factors. 
D)  Every decision model has both objective and subjective factors.

Question 19

Options models are used to assist in project selection decisions:

Accepted Answer

A)  When IRR calculations are favorable but NPV calculations are unfavorable. 
B)  When a company may not recover the money it invests in a project. 
C)  When NPV calculations are favorable but IRR calculations are unfavorable. 
D)  When a company is guaranteed to recover the money it invests in a project.

Question 20

The pairwise comparison approach:

Accepted Answer

A)  Is a method to split the weights assigned to subcriteria. 
B)  Is a method to compare pairs of hierarchies prior to any further analysis. 
C)  Is a means of achieving all project objectives within the allocated time frame. 
D)  May be used instead of AHP if time is limited.

Exam 3: Project Selection and Portfolio Management