Portfolio Management Professional (PfMP) — Question 48

Two organizations merge and consolidate all key portfolios. As a result, a new strategic direction is communicated.
What should the portfolio manager do next?

Answer options

• A. Eliminate the components in each portfolio that generate the least revenue.
• B. Continue to independently manage the portfolios.
• C. Terminate the existing portfolios and develop new ones.
• D. Reevaluate and prioritize the portfolios’ components.

Correct answer: C

Explanation

The correct answer is C because after a merger, it is essential to start fresh with new portfolios that align with the merged organization's strategic direction. Options A and B do not address the need for a new strategic approach, while D, although valuable, suggests a reevaluation rather than a complete overhaul which is necessary after a merger.