IFMA Updated CFM Exam Questions and Answers by josie

The Best and Highest Use principle in real estate valuation requires passing four tests:

Physically Possible – The land or building must accommodate the intended use.

Legally Permissible – Must comply with zoning, environmental laws, and regulations.

Financially Feasible – Must generate enough income or benefits to justify the investment.

Maximally Productive – Must provide the highest return compared to other uses.

While strategic planning (A, C) and location (D) are important considerations, they do not meet all four criteria required for determining best and highest use​.

Defining the project team requires clear roles, responsibilities, and task allocation. The three key tools are:

Work Breakdown Structure (WBS): Defines tasks and subtasks, ensuring clarity on who does what.

Project Organizational Chart: Maps out the project team, including reporting structures.

Responsibility Matrix (RACI): Clearly defines who is responsible, accountable, consulted, and informed for each task.

Why the other options are incorrect:

(A) The corporate org chart and HR policies are useful but do not define project-specific roles.

(C) A task list and RFP help with initial planning but do not structure the project team.

(D) Budget and schedule are important but focus on project execution, not team definition​.

The foundation of risk management strategies is a clear understanding of how the organization will respond to risks (Option C).

Why Option C is Correct?

Risk management is about preparing for and mitigating potential threats.

FM professionals must develop response plans, contingency measures, and risk assessments to minimize disruptions.

IFMA’s Emergency Preparedness & Business Continuity competency emphasizes risk identification and actionable response strategies.

Why Other Options Are Incorrect?

Option A (Knowledge of departmental goals, risks, and objectives): This helps identify risks but does not define how to respond to them.

Option B (Knowledge of leadership strategies): Leadership strategies guide decision-making, but risk management focuses on concrete response actions.

Effective performance management integrates clear, measurable goals with continuous feedback and coaching. The correct approach:

Establishes SMART (Specific, Measurable, Achievable, Relevant, Time-bound) performance measures.

Aligns individual goals with departmental and organizational objectives.

Provides monthly coaching sessions to track progress and address challenges.

Why the other options are incorrect:

(A) Relying solely on organizational policy may not ensure personal engagement and accountability.

(B) An annual review alone lacks ongoing support and adjustment opportunities.

(C) Monthly reports are useful, but structured coaching provides better guidance and motivation.

A well-structured performance management system fosters employee growth, engagement, and long-term success​.