CIMA Strategic Level Case Study Exam P3 Real Exam Questions and Answers FREE Updated on May 06, 2023
P3 Ultimate Study Guide - DumpExam
Format of the CIMA P3: Risk Management Exam
- Format: Numerous choices, multiple responses
- Language: English
- Length of Examination: 90 minutes
- Passing score: 70 percent
- Number of questions: 60
NEW QUESTION 20
The Committee of Sponsoring Organisations (COSO) outlined six key principles of Enterprise Risk Management (ERM).
Which of the following are COSO key principles?
- A. A comprehensive and holistic approach to risk management.
- B. The creation of a risk aware culture.
- C. Risk management is the responsibility of the risk committee.
- D. Consideration of the main risk only which is financial risk.
- E. Consideration of risk management in the context of business strategy.
Answer: A,B,E
NEW QUESTION 21
DBB is a mining company. The company's business requires manners to work underground in hazardous conditions DBB takes every possible precaution to protect the safety and wellbeing of its miners, but that does not prevent the occurrence of four or five serious injuries every year. That number is small in relation to the many thousands of owners employed by DBB.
DBB's Board is preparing a risk map Most directors believe that injuries to miners should be classified as high Likelihood and high impact, which Is a category of risk that should be avoided according to the TARA framework One of the directors has suggested that the risk should be classified as low likelihood and high impact because that would move the risk into the quadrant associated with transference or sharing and so could be draft with by, say, insurance Which TWO of the following are correct?
- A. Risk maps enable companies to identify the correct migration for any given risk
- B. Discussing likelihood and impact will help DBB's Board to mitigate the risk of industrial inquiry
- C. The fact that there are very few accidents supports the argument that the likelihood
- D. it is unlikely that DBB will be able to transfer the risk of these injuries by insurance.
- E. The director's recommendation that the risk should be reclassified will make the risk map more useful
Answer: A,C
NEW QUESTION 22
Which THREE of the following are principles of good corporate governance according to the UK Corporate Governance Code?
- A. Reliability
- B. Accountability
- C. Leadership
- D. Remuneration
- E. Honesty
Answer: B,C,D
NEW QUESTION 23
H Ltd is a company providing postal and courier services to small businesses. Customers pay a monthly or annual subscription fee to use the service, plus a very small fee for each item delivered.
A year ago, H employed a new sales team. Their remuneration is dependent on the number of new customers they sign up. Sales increased dramatically in the first six months, but now difficulties are emerging such as new customers dropping their subscription once the initial period has expired; subscriber direct debits being returned unpaid; subscribers going out of business and other similar issues.
Which of the following would be appropriate to help resolve these problems?
- A. Alter the commission arrangements so that commission is payable only when the subscriber signs up for a second year.
- B. Ensure that a credit check is carried out before a subscriber is accepted.
- C. Reduce the rate of commission payable to any sales person who fails to sign up at least an agreed minimum number of customers each month.
- D. Preparing a monthly report for sales persons detailing the performance of each new customer they have signed up over the previous year.
- E. Alter the pricing structure in order to increase the price for sending each item but decrease the subscription element of the fee.
Answer: A,B,D
NEW QUESTION 24
ABC is a large supermarket chain which also has online shopping and home deliveries It has a 24/7 service which runs on a central server allowing all customers to enter new orders at any time This is a business critical service which, if not available, may lead to customers turning to alternative supermarket chains offering similar services, resulting in immediate turnover loss and possible long term customer loss.
ABC is contemplating the implementation of a hot standby facility, not only to cover for emergency disaster recovery, but also to allow for business continuity, allowing necessary maintenance and updates without service interruption.
Which of the following cybersecurity objectives is ABC concerned about in this scenario?
- A. Availability
- B. Integrity of data
- C. Integrity of processing
- D. Confidentiality
Answer: A
NEW QUESTION 25
M is a multinational IT company with headquarters in Asia and with operations in all continents.
It is now trying to expand its operations in Europe. This is seen as a major challenge as the European market is very well developed with established players in fierce competition against each other.
As well as developing and producing its own products, it sources products across Asia, America and Europe as part of infrastructure deals which have to include as much of its own equipment as possible. In doing this, transfer prices can be set in YEN, USD, EURO, GBP. Transfer prices are revised every month in line with production times as most goods are made on short order times with sales cycles running at 3-4 months.
The longer sales cycle against committed transfer pricing presents problems as customers expect quotes to be valid for 90 days whereas M's suppliers reserve the right to revise pricing at the end of every month with quotes only valid for 8 days in the following month.
How should M deal with this problem?
- A. Use a centralised treasury function to set up unilateral netting so that all trades can be balanced off against each other before any money is transferred.
- B. Incentivise sales persons to be more accurate when forecasting prices.
- C. Offer a small discount for any customers who pay in M's home currency.
- D. Do nothing, everyone is in the same situation.
Answer: A
NEW QUESTION 26
In terms of Cyber Security, which THREE of the following represent Personally Identifiable Information (Pll)?
- A. First pet's name
- B. Model of first car.
- C. Old phone number
- D. Sports club membership number
- E. Position held in a charity.
- F. Football team affiliation
Answer: D,E,F
NEW QUESTION 27
Z is a multinational pharmaceuticals company with operations across Europe, America and Asia.
It is currently investigating the possibility of setting up a chemical and specialist production facility in South America. This would be a multi $billion investment. What steps should Z take to manage the following risks in this long term venture.
Answer:
Explanation:
NEW QUESTION 28
Which of the following scenarios might be relevant stress tests for a potential lender to conduct? Which TWO of the following answers are correct?
- A. The potential borrower might have manipulated the figures in the loan application.
- B. The potential borrower might have to agree to a major wage increase for its employees.
- C. The potential borrower could be involved in an accounting scandal
- D. The potential borrower might seek further debt in the future.
- E. The potential borrower might lose its three main customers.
Answer: B,E
NEW QUESTION 29
B uses a balanced scorecard to monitor the performance of its divisions.
Classify each of the following decisions taken by a division's management team as either commercially sound or dysfunctional.
Answer:
Explanation:
NEW QUESTION 30
Which of the following statements are true of economic risk?
- A. Economic risk is something which cannot be avoided
- B. Economic risk may be caused by international trade
- C. Economic risk is influenced by many factors
- D. Economic risk is easy to measure
Answer: B,C
NEW QUESTION 31
You are in process of compiling a risk register for P, a company which maintains railway tracks. This helps prevent accidents and ensures the trains are not disrupted due to problems with the track.
Which of the following statements are valid?
- A. A risk register should profile each risk in terms of probability and consequence.
- B. A risk register should concern itself with only the direct consequences of each risk such as injury to passengers and ignore indirect risks, such as re-routing trains due to an accident.
- C. A properly compiled risk register will identify all the risks to which P could possibly be exposed.
- D. The risk register for P should be updated frequently: for example, every two weeks.
- E. The risk register should specify the individual, or group of individuals, responsible for the management of each risk.
Answer: A,E
NEW QUESTION 32
Which of the following statements concerning the use of balanced scorecards to measure divisional performance is correct?
- A. The input for balanced scorecard reports comes from many sources so it is not possible to misrepresent performance.
- B. Contradictory and inconsistent targets prevent balanced scorecards being a useful tool for performance evaluation.
- C. Dysfunctional behaviour is more difficult than under traditional reporting because a wide range of factors will be measured and reported.
- D. Dysfunctional behaviour is impossible because divisional managers are evaluated on so many different decisions.
Answer: C
NEW QUESTION 33
K is a manufacturing company. It has sourced new equipment from the US to equip a new production facility.
It has to make a payment of USD1,000,000 in 3 months' time.
K's production manager needs to know whether it is cheaper to use a forward contract or a money market hedge.
Current spot and forward exchange rates are as follows:
Current mid-point money market rates (annual) are as follows:
Ignoring taxation, which of the following statements is correct?
- A. The money market hedge saves GBP32,078
- B. The forward contract saves GBP2,629
- C. The money market hedge saves GBP15,196
- D. The forward contract saves GBP1,901
Answer: C
NEW QUESTION 34
M is updating the risk register for KRW, a listed company. KRW is a large multinational corporation operation. Which THREE of the following statements are correct?
- A. Interdependencies between risks should be excluded.
- B. Monetary value of risks should be allocated if possible.
- C. The register should include all the risks to which KRW is exposed.
- D. The register should include details of who is responsible for dealing with each risk.
- E. Probabilities of risks occurring should be included if possible
Answer: C,D,E
NEW QUESTION 35
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