Practice Test Geeks(CCM) Certified Commercial Manager Practice Test
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Portfolio Management & Strategy Flashcards

7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Which portfolio balancing technique plots business units on a matrix using market growth rate and relative market share?

    Answer: BCG Growth-Share Matrix

    The BCG Growth-Share Matrix uses market growth rate and relative market share to categorize business units as Stars, Cash Cows, Question Marks, or Dogs.

  2. A portfolio manager notices that a product line generates high cash flow but operates in a low-growth market. In BCG terms, this is best described as a:

    Answer: Cash Cow

    A Cash Cow has high relative market share in a low-growth market, generating more cash than it consumes.

  3. In portfolio strategy, 'strategic fit' refers to:

    Answer: The degree to which business units share resources or capabilities that create synergies

    Strategic fit describes how well business units complement each other by sharing resources, capabilities, or market positions to create value.

  4. Which strategy involves a company expanding its portfolio by acquiring businesses in unrelated industries?

    Answer: Conglomerate diversification

    Conglomerate diversification involves entering entirely different industries, spreading risk but reducing strategic synergy.

  5. The primary purpose of portfolio-level risk management is to:

    Answer: Optimize the aggregate risk-return profile across all business units

    Portfolio-level risk management seeks to balance and optimize the combined risk-return profile rather than manage risks in isolation.

  6. A 'harvesting' strategy within a portfolio typically involves:

    Answer: Gradually extracting cash from a declining business while minimizing investment

    Harvesting maximizes short-term cash flows from a business unit that has limited long-term prospects, minimizing further investment.

  7. Which financial metric is most commonly used to compare the value created by different business units within a portfolio?

    Answer: Economic Value Added (EVA)

    EVA measures the profit earned above the cost of capital deployed, enabling comparison of true value creation across portfolio units.