Portfolio Management Professional (PfMP) — Question 51

If a portfolio manager is considering how to retain or improve the portfolio’s revenue while decreasing cost, which technique would be most helpful in assessing the best possible level of return?

Answer options

• A. Cost-benefit analysis
• B. Portfolio efficient frontier
• C. Scoring model
• D. Strengths, weaknesses, opportunities, and threats analysis

Correct answer: A

Explanation

A Cost-benefit analysis is effective for determining the best return on investment by weighing the expected benefits against the costs. The Portfolio efficient frontier helps visualize optimal risk-return trade-offs but does not directly assess revenue and cost dynamics. A Scoring model is useful for prioritizing options but lacks a direct financial assessment. The SWOT analysis focuses on strategic planning rather than financial return assessments.