Cisco
CompTIA
ISC
EC-Council
EXIN
Fortinet
ITIL
Juniper
Microsoft
VMware
Avaya
SAP
Google
NVIDIA
Salesforce
Amazon
Palo Alto Networks
ISC2
Splunk
ServiceNow
All Vendors
  2. Home
  3. Exams
  4. CIMA
  5. CIMAPRA19-P03-1

CIMA CIMAPRA19-P03-1 Exam Questions
P3 Risk Management (Online) (Page 4 )

Updated On: 15-Feb-2026
Page 4 of 56
PDF with 275 Questions

GUJ A small but rapidly expanding company has recently opened several branches in locations far away from the Head Office. All of the branches are relatively small with no one branch accounting for more than 5% of turnover. Management has decided that the company is not yet large enough to install an Internal Audit function but is, nonetheless, concerned about maintaining adequate control and monitoring at the branches whilst allowing Branch Managers the opportunity to react to local circumstances as appropriate.
Which of the following measures would assist Head Office management in maintaining appropriate monitoring and control at the branches?

  1. Restricting the autonomy of individual Branch Managers to purely routine matters and instructing them to refer everything else to Head Office.
  2. Dealing with all Human Resource, recruitment, and similar issues directly from Head Office.
  3. Arranging visits by senior management to each branch periodically.
  4. Instituting the use of a formalised budgetary control system at head office for all branches.
  5. Establishing an open communication policy for employees at branches to allow them to contact Head Office on any matter that concerns them.

Answer(s): C,D,E



Company W produces mobile phone components and has recently tendered for a substantial contract. The results of the tendering process will not become available until three months from now. If the company is successful it will require 2,000 units of a commodity which is currently traded in an open commodity market for $740 per unit. However, there has been speculation that this commodity could increase substantially in price over the next three months and so the company is considering purchasing the commodity now and storing it for three months. The funds to buy the commodity would be borrowed at an annual interest rate of 7% and the storage cost of the product would be $5.40 per unit per month. The storage costs would be paid at the end of the three month storage period.

Which of the following represents the gain or loss (to the nearest thousand dollars) that will accrue to Company W assuming that the price of the commodity rises to $800 in three months' time?

  1. $62,000 gain
  2. $95,000 gain
  3. $88,000 gain
  4. $16,000 loss

Answer(s): A



TYU is a retailer selling televisions. The company is financed wholly by equity.
Why might TYU be exposed to interest rate risk?

  1. Customers' disposable income may change.
  2. TYU's competitors may have variable rate borrowings.
  3. TYU's suppliers may have borrowings.
  4. TYU's cost of capital will vary with interest rates.
  5. TYU's competitors may have fixed rate borrowings.

Answer(s): A,B,C



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?

  1. 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.
  2. Offer a small discount for any customers who pay in M's home currency.
  3. Do nothing, everyone is in the same situation.
  4. Incentivise sales persons to be more accurate when forecasting prices.

Answer(s): A



The long-term prospects for inflation in the UK and the USA are 2% and 6% per annum respectively.
The GBP/USD spot rate is currently GBP/USD1.71.
Using purchasing power parity theory, what GBP/USD spot rate would you expect to see in three months' time?

  1. GBP/USD1.69
  2. GBP/USD1.73
  3. GBP/USD1.77
  4. GBP/USD1.65

Answer(s): B






Post your Comments and Discuss CIMA CIMAPRA19-P03-1 exam dumps with other Community members:

Join the CIMAPRA19-P03-1 Discussion