P3 Risk Management CIMAPRA19-P03-1-ENG Dumps

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1. Risk management involves all parties in an organization.

Which of the following describe the Board's responsibilities for risk management?

A. The Board is responsible for choosing the least risk products to promote.

B. The Board is responsible for maintaining a robust system of internal controls.

C. The Board is responsible for addressing any weaknesses in internal controls.

D. The Board is responsible for considering whether weaknesses in internal controls need to be addressed.

E. The Board is responsible for safeguarding the company's assets.

Answer: B,D,E Download Passcert Latest & Valid CIMAPRA19-P03-1-ENG Free Dumps To Ensure Your Success

2. Which TWO of the following are reasons for a company to comply with the Committee of Sponsoring Organisations of the Treadway Commission 2017 Enterprise Risk Management Framework (COSO Framework)?

A. Complying with the COSO Framework will mean all employees of a company will comply with internal controls B. Complying with the COSO Framework will mean that a company's internal controls will work properly C. Complying with the COSO Framework will mean there is a good structure to a company's risk management system D. Complying with the COSO Framework will mean that all staff will understand a company's risk management system E. Complying with the COSO Framework will improve a company's reputation Answer: C,E

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3.A Firewall is an element of a company's Information Technology infrastructure.

Which THREE of the following are characteristics of a Firewall?

A. A Firewall determines the boundary of the "Trusted" components of the company's Information Technology infrastructure.

B. A Firewall protects sensitive data against accidental or malicious damage.

C. A Firewall protects the computer suite against physical attack.

D. A Firewall protects against unauthorised network access.

E. A Firewall protects against viruses.

F. A Firewall can screen every message coming into or out of the company network looking for key words, or attachments.

Answer: A,D,F Download Passcert Latest & Valid CIMAPRA19-P03-1-ENG Free Dumps To Ensure Your Success

4. K has several subsidiary companies. The directors of K's subsidiaries are paid an annual b onus based upon their particular subsidiary's reported profits.

The directors of one of K's subsidiaries are considering the choice between two models of a machine.

Which of the following is most likely to explain the decision to choose model X over model Y? A. Model X has a better combination of investment and running costs.

B. Model X is the less risky investment.

C. Investing in model X will mean the subsidiary will show a higher profit.

D. Investing in model X will lead to a higher share price.

Answer: C

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5. VBN's home currency is the V$. On 1 January, VBN must make a payment of C$2 million on 31 March of that same year.

On 1 January the spot exchange rate was V$1 = C$0.4.

On 1 January VBN paid $180,000 for a call option to buy C$2 million for V$5.5 million on 31 March. VBN's cost of borrowing was 8% per year.

On 31 March the spot rate was V$1 = C$0.45.

What was the total cost, including the cost of the option, of settling the payable?

A. V$4.628 million B. V$5.684 million C. V$4.444 million D. V$5.5 million Answer: A

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6. Which of the following summarises Purchasing Power Parity Theory (PPPT)?

A. Government intervention cannot affect the inevitable rise or fall of its currency in the short-term.

B. The difference between the spot and the forward exchange rates is equal to the differential between the inflation rates in the two countries.

C. PPPT predicts that the country with the lower inflation rate will see the currency devalue accordingly.

D. The difference between the interest rates in the two countries is equal to the differential between the spot and the forward exchange rate for the currency in the two countries.

Answer: B Download Passcert Latest & Valid CIMAPRA19-P03-1-ENG Free Dumps To Ensure Your Success

7. A project has a net present value of $2 million.

Total cash outflows of this project have a present value of $14 million, which includes staff costs of $10 million.

What is the project's sensitivity to staff costs?

A. 20% B. 63% C. 71% D. 14% Answer: A

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8. The treasurer of IOK is considering entering into a money market hedge in order to hedge a payable.

Which of the following might be valid explanations for the use of a money market hedge for this purpose?

A. There are no forward contracts available for the purchase of the payable currency using IOK's home currency.

B. The timing of the payable does not permit the use of a forward contract.

C. The relevant currency markets are very thinly traded and the treasurer believes that forward contracts are mispriced.

D. A money market hedge is easier and less expensive to organise than a future or forward contract.

E. Money market hedges can be unwound whereas positions in derivatives cannot.

Answer: A,B,C

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9. A project has been evaluated on the basis that it will cost $14 million and will have a net present value of $2.3 million.

The project has commenced and $3 million of the initial $14 million has been invested. A problem has been discovered that will cost an additional $2.5 million to rectify. The $2.5 million will be payable immediately.

What is the NPV of continuing with this project?

A. -$3 million B. -$0.2 million C. $1.8 million D. $2.8 million Answer: D Download Passcert Latest & Valid CIMAPRA19-P03-1-ENG Free Dumps To Ensure Your Success

10. James owns a small company which sometimes suffers from credit risk.

Which of the following measures should he put in place to help reduce this risk?

A. Introduce credit checks for new customers.

B. Reduce the company bank loans.

C. Pay suppliers' invoices quicker.

D. Look for a loan with a lower interest rate.

Answer: A

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