CIMA Risk Management - P3 FREE EXAM DUMPS QUESTIONS & ANSWERS]

Question 1

The interest rate on EUR deposits is 7%. The interest rate on GBP deposits is 5%. The spot rate is EUR/GBP0.8500. What is the one year forward rate predicted to be assuming interest rate parity holds true?

A. 0.9633 B. 0.8341 C. 0.8662 D. 0.7500

Discussion 0

Correct Answer: B Vote an answer

Question 2

Which THREE of the following form part of the role of Internal Audit?

A. Working with operational management teams to help identify risks to the business. B. Monitoring the effectiveness of controls implemented by operational management C. Implementing internal controls which address the key business risks identified by the risk management team D. Providing training to operational management on the identification of risk E. Carrying out special investigations of risk. F. Working with operational management teams to devise new controls to help minimise risk to the business.

Discussion 0

Correct Answer: A,B,D Vote an answer

Question 3

Y plc, a pharmaceutical company, has dealt with a number of risks in the manner indicated below.
Use the TARA framework to classify each of Y plc's responses.

Discussion 0

Correct Answer:

Question 4

B is a horticultural retailer with limited funds available to acquire new retail property.
B's Finance Manager has analysed two potential property investments. Investing in property P shows an IRR of 21% while the IRR on property Q is 17%.
The Finance Manager has also advised that the NPV for property P is $750K, while the NPV of property Q is
$850K.
The Board needs to choose between the two properties as it has insufficient funds for both. Based purely on the Finance Manager's analysis, which of the following is true?

A. Board members who wish to maximise return on capital employed will want property Q while those who wish to maximise shareholder wealth will want property P. B. Premises Q is clearly better than property P in all respects. C. Premises P is clearly better than property Q in all respects. D. Board members who wish to maximise return on capital employed will want property P while those who wish to maximise shareholder wealth will want property Q.

Discussion 0

Correct Answer: D Vote an answer

Question 5

The Board of Directors of VCX, a state-owned electricity company, includes four executive directors the Chief Executive Officer, the Finance Director the Operation Director and the Technical Director All of the shares in the company vest in the Office of the Minister for Energy, who is entitled to appoint two non-executive directors to the Board It has been alleged that the Minister appoints political "insiders" who have no particular knowledge of. or interest in. the electricity industry There are three further non-executive directors
* L, who spent seven years as Chief Executive of VCX, but retired from that role two years ago,
* M, who spent several years on the Board of a state electricity company in a different country to VCX but who resigned from it before accepting the position with VCX: and
* N, who is a qualified and experienced professional accountant
In relation to best practice in respect of Corporate Governance, which of the following statements are valid?
Select ALL that apply

A. M is unsuitable to be part of the Board because his previous involvement with a similar company in another country is a conflict of interest. B. M and N are both suitable appointees to the Audit Committee C. The Finance Director should be part of the Audit Committee because of her expertise D. L can now be considered to be an independent non-executive director E. None of the executive directors should be allowed to sit on the Remuneration Committee F. Non-executive directors should be responsible for monitoring the performance of executive management especially with regard to company strategy and objectives

Discussion 0

Correct Answer: B,E,F Vote an answer

Question 6

Which TWO of the following are likely to be consequences of a weak control environment?

A. Poor compliance with control procedures B. The Board risks being poorly informed C. The Board will insist on improved controls. D. The Board will be free to focus on strategy. E. Mid-level Managers will request improved controls

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Correct Answer: A,B Vote an answer

Question 7

A company has a sound system of internal controls that have been reviewed by the internal audit department.
Which TWO of the following correctly identify reasons why the company's control system might fail to prevent or detect an irregularity?

A. The internal audit department cannot be expected to identify control weaknesses. B. The accounting system could combine manual and computerised controls. C. A director could override a control procedure. D. Two fraudulent members of staff could collude. E. A dishonest member of staff could input an invalid transaction

Discussion 0

Correct Answer: C,D Vote an answer

Question 8

A junior sales clerk at BCD, a wholesale jewellers, received an email which appeared to be from a well known parcel delivery company informing her that a delivery had been attempted outside office hours and had consequently failed She was asked to click on a link and complete some seemingly innocent but logical questions to effect the delivery on the next day She thought no more about it but was very surprised the next month to be awarded salesperson of the month as her sales had doubled Unfortunately, on investigation it was found that this was as a result of several fraudulent orders for high-value items that had seemingly been placed by an existing customer but delivered to a new address, which turned out to be a temporary box number The existing customer's credit card had been fraudulently charged for these orders Which of the following types of cyber-attack had the sales clerk been a victim of?

A. Malvertising B. Trojan C. Ransomware D. Botnets

Discussion 0

Correct Answer: A Vote an answer

Question 9

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 10

Which categories on a risk map best describe the loss of sales floor staff in a fast fashion chain?

A. Low likelihood; high consequence B. Low likelihood; low consequence C. High likelihood, low consequence D. High likelihood; high consequence

Discussion 0

Correct Answer: C Vote an answer

Question 11

An oil company has entered into a joint venture with a competing oil company to develop a new oil field. The joint venture arrangement is intended to mitigate the risks associated with developing the oil field.
The following disclosure appears in the oil company's risk report:
"Many of our large projects and operations are conducted through joint ventures. These arrangements involve complex risk allocation and indemnification arrangements and we have less control over these activities than we would have if we had full ownership and control. Our partners may have economic or business interests that are opposed to ours, and may exercise the right to block key decisions or actions. We believe the joint arrangement is in our best interest." Which of the following statements are correct?

A. Now the shareholders know the directors are aware of the risk. B. If the risk report had not reported the risk the shareholders might not have been aware of the risk. C. The risk report means that the shareholders know exactly how bad the risk is. D. The shareholders now have more useful information. E. The risk report says nothing useful about the risk.

Discussion 0

Correct Answer: A,B,D Vote an answer

Question 12

You are a consultant to an international charity which provides aid to people displaced by war, civil unrest, and natural disaster. The charity has requested you to carry out a post implementation review on their new procurement and logistics system. Which TWO of the following should you be most concerned about when conducting this review?

A. An assessment of how the aid is used once it has arrived at its destination. B. To create a record of good and bad experiences in relation to the implementation of the project so that the charity is able to learn from them should they decide to implement a similar project in the future. C. An assessment of the extent to which the new system has led to more efficient delivery of aid to those in need. D. The identification of the reason for any cost overruns so as to be able to assign responsibility to particular individuals so that the management can deal with them as they see fit.

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Correct Answer: B,C Vote an answer

Question 13

Which risks should be given the highest priority?

A. Risks which have a low impact but which arise frequently. B. Risks which have a high impact and have a low likelihood of arising. C. Risks which have a low impact and a low likelihood of arising. D. Risks which have a high impact and which may arise occasionally.

Discussion 0

Correct Answer: D Vote an answer

Question 14

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 15

Which of the following statements are true of residual risk?

A. Residual risk has to be accepted. B. Residual risk should never be accepted. C. Residual risk may be accepted if management feels the company can bear the risk. D. Residual risk is the risk that remains after risk mitigation has taken place. E. If residual risk is too great then the company should not expose itself to the risk situation.

Discussion 0

Correct Answer: C,D,E Vote an answer