CIMA Risk Management - CIMAPRA19-P03-1 FREE EXAM DUMPS QUESTIONS & ANSWERS]

Question 1

Which of the following will increase the value of a call option?

A. An increase in the strike price. B. A decrease in the volatility of the share. C. A decrease in the market value of the share. D. An increase in the time to expiry.

Discussion 0

Correct Answer: D Vote an answer

Question 2

P has decided to invest in a new warehouse at a cost of $2,000,000. The discount rate of the project is 18% and the present value of the tax shield is £26,000.
What is the minimum acceptable Internal Rate of Return of the project?

A. 16.50% B. 18% C. 17.77% D. 18.23%

Discussion 0

Correct Answer: C Vote an answer

Question 3

There are many method for appraising capital projects.
Select ALL correct statements.

A. Opportunity cost is only relevant when capital is scarce. B. The time value of money should be the same for all similar competing projects. C. Net Present Value evaluation considers a range of different discount rates considering different risk factors and finance methods. D. Decisions should only consider the financial implications of the project. E. No one method of capital appraisal taken alone is adequate to evaluate competing projects. F. All projects should be evaluated using sensitivity analysis.

Discussion 0

Correct Answer: B,C,E Vote an answer

Question 4

ZZ is a data security company that is responsible for cyber security m a large shopping mall 21 uses Network Configuration Management (NCM) to assist it in meeting the various needs of the mall's user community.
Which THREE of the following are advantages provided by NCM?

A. NCM allows ZZ to stop malware from being spread for different user groups in the mall B. NCM allows ZZ to segregate traffic for different user groups in the mall C. NCM allows ZZ to provide different service levels for different user groups in the mall D. NCM allows ZZ to restrict traffic for different user groups in the mall E. NCM allows ZZ to prevent scanners being used on the public WiFi for different user groups in the mall F. NCM allows ZZ to prevent data corruption for different user groups in the mall

Discussion 0

Correct Answer: B,C,E Vote an answer

Question 5

Which TWO of the following are benefits of carrying out a post-completion audit of capital projects?

A. A post-completion audit can help find out who was to blame for a project exceeding the budget. B. A post-completion audit can help management understand what went wrong with a project in order to try and prevent the same problem occurring in the future. C. A post-completion audit can help find out where a project went wrong so it can be fixed immediately. D. A post-completion audit can investigate variances from the budget on completed projects.

Discussion 0

Correct Answer: B,D Vote an answer

Question 6

The shares of a company have a beta factor of 1.15. Therefore, which of the following must be true?

A. The shares have less unsystematic risk than the stock market average. B. The shares have more unsystematic risk than the stock market average. C. The shares have more systematic risk than the stock market average. D. The shares have more total risk than the stock market average.

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Correct Answer: C Vote an answer

Question 7

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

A. 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. 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. Government intervention cannot affect the inevitable rise or fall of its currency in the short-term. D. PPPT predicts that the country with the lower inflation rate will see the currency devalue accordingly.

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Correct Answer: B Vote an answer

Question 8

You are the Management Accountant for P, a food manufacturing company with an annual sales revenue of $5 million.
You discover that the Production Manager's records are inconsistent. Raw materials purchased do not agree to the total recorded for transfers to production plus wastage. There is an average shortfall of 2% of purchases.
You investigated and discovered that there are often mistakes made during manufacturing that results in food that is safe to eat, but cannot be sold because of visual flaws. The Production Manager is supposed to scrap all such damaged product and write all such losses off as waste, but you discovered that he has been giving the damaged food to a charity that assists homeless people. No records are made of such gifts in order to conceal the losses due to manufacturing errors.
What should you do?

A. Instigate a review of the production process to potentially reduce the amount of wastage. B. Do nothing, this is a good cause and the amount is insignificant. C. Instigate a confidential, but documented, review with the Production Manager and tell him to stop. D. Instigate disciplinary action, this is both theft and poor management. E. Instigate a process whereby edible but unsellable items can be given to the charity officially.

Discussion 0

Correct Answer: A,C,E Vote an answer

Question 9

As part of risk assessment exercise for a low-cost airline you are requested to match the risks listed below with the most approriate method of minimising or dealing with each risk.

Discussion 0

Correct Answer:

Question 10

D is a large oil refinery.
The managers have identified four risks shown in the risk map below:
Which of the risk mitigations listed below would be the best for dealing with the two risks classified as medium likelihood and high impact?

A. Reduce B. Transfer C. Accept D. Avoid

Discussion 0

Correct Answer: B Vote an answer