PfMP Portfolio Performance Management Practice Question
A portfolio manager notices that the actual portfolio ROI is significantly lower than the forecasted ROI. What is the first step the manager should take to address this variance?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Conduct a variance analysis comparing actual performance against the Portfolio Management Plan.
The first step is to analyze the root cause of the variance by reviewing performance data against the Portfolio Management Plan before initiating changes.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Adjust the resource allocation for all active components.
Why it's wrong here
This is a reactive measure that ignores root cause analysis.
- ✗
Terminate underperforming components immediately.
Why it's wrong here
Termination is a extreme measure that requires justification through formal analysis.
- ✗
Update the Portfolio Strategic Plan to align with lower ROI expectations.
Why it's wrong here
The strategy should not be changed solely because of a single variance without investigation.
- ✓
Conduct a variance analysis comparing actual performance against the Portfolio Management Plan.
Why this is correct
Variance analysis is the correct first step to identify the root cause of performance deviations.
About these practice questions
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed August 2026 · checked against the official PMI exam blueprint
This PfMP practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PfMP exam.