[Oct-2023] CIMA Strategic Level Case Study Exam P3 Exam Practice Test Questions Dumps Bundle!
2023 Updated P3 PDF for the P3 Tests Free Updated Today!
Preparing for the CIMA P3 exam requires a thorough understanding of risk management theory and practice, as well as familiarity with the exam format and question types. CIMA provides a range of study resources for P3, including study texts, revision cards, and practice exams. It is also recommended that candidates attend training courses and participate in study groups to help them prepare for the exam.
NEW QUESTION # 65
Which of the following risks should be given highest priority?
- A. Risks which have a low impact and a low likelihood of arising
- B. Risks which have a low impact but which arise frequently
- C. Risks which have a high impact and which may arise occasionally
- D. Risks which have a high impact and have a low likelihood of arising
Answer: C
NEW QUESTION # 66
The list below has duties performed by risk managers and internal auditors. Show who would carry out the duties assuming the company has both risk managers and internal auditors.
Answer:
Explanation:
NEW QUESTION # 67
S is a senior production manager for LK, which is about to set up a new production line requiring S4 million of new specialist equipment.
S's daughter goes to school and is friends with the daughter of R.
the sales manager in GG. GG is a potential supplier of the specialist equipment that LK requires.
R owns a holiday home. S's daughter regularly accompanies R's daughter on family vacations at this holiday home, all at R's expense.
S is the only person working for LK who is qualified to select the specialist equipment. GG will definitely bid for the sale.
What should S do?
- A. S should exclude GG from the bidding process.
- B. S should declare an interest, giving details of his daughter's friendship with R's daughter, but should participate fully in the assessment process
- C. S should permit GG to bid, but should insist that R should not be involved.
- D. S should declare an interest and withdraw from the assessment process.
Answer: B
NEW QUESTION # 68
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. The risk report means that the shareholders know exactly how bad the risk is.
- B. The risk report says nothing useful about the risk.
- C. If the risk report had not reported the risk the shareholders might not have been aware of the risk.
- D. The shareholders now have more useful information.
- E. Now the shareholders know the directors are aware of the risk.
Answer: C,D,E
NEW QUESTION # 69
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?
- A. GBP/USD1.65
- B. GBP/USD1.69
- C. GBP/USD1.73
- D. GBP/USD1.77
Answer: C
NEW QUESTION # 70
Company A's gross profit percentage has fallen from 70% to 61 % Which of the following possible explanations would most concern the internal auditors?
- A. The sales director decided to reduce the selling price to increase the market share
- B. During the year direct wages had been misclassified as indirect manufacturing expenses
- C. During the year the raw material price increased due to an international shortage of the material
- D. There had been an omission of several items from the inventory records
Answer: D
NEW QUESTION # 71
H sells machinery and also associated services, such as advice and repairs. H's industry is going through considerable transformation.
Classify each of the examples of information available to H's management as strategic, operational or of having little value.
Answer:
Explanation:
NEW QUESTION # 72
In terms of Cyber Security, which THREE of the following represent Personally Identifiable Information (Pll)?
- A. First pet's name
- B. Sports club membership number
- C. Football team affiliation
- D. Model of first car.
- E. Old phone number
- F. Position held in a charity.
Answer: B,C,F
NEW QUESTION # 73
Move the category of risk to the box beside the risk description it best matches.
Answer:
Explanation:
NEW QUESTION # 74
CVB is a consulting firm that occupies a large office with many individual staff offices Staff access the corporate network through a wired network AM work files and company emails are accessed through this network CVB is upgrading its office heating system At present, each room in the building has a simple, mechanical thermostat that can be used to regulate the heating CVB plans to install smart thermostats in each room These will make it possible to reduce heating costs by monitoring room temperatures centrally, using software that will be installed on the corporate network It would be expensive to connect the thermostats to CVB's existing wired network but it would be possible to connect a wireless router to the network so that CVB could install wireless smart thermostats instead The software on the network's server could then monitor and control the thermostats via the Wi-Fi connection that would be created by the wireless router.
Which TWO of the following statements are correct?
- A. Cyber criminals could not identify and exploit vulnerabilities in the heating system
- B. The wireless thermostats could enable a breach of CVB's data
- C. Security concerns should not prevent CVB from upgrading its heating system
- D. The wireless thermostats will be designed to be secure
- E. Wired network connections are outdated and should not be used
Answer: B,C
NEW QUESTION # 75
The internal audit department should always give a report at the end of its audit. This report is intended to be useful and help the company going forward. The report should always include any recommendations for improvements. Which of the following statements are true and which are false?
Answer:
Explanation:
NEW QUESTION # 76
Assuming a company has both internal auditors and risk managers, indicate which of these would perform the duties listed below:
Answer:
Explanation:
NEW QUESTION # 77
TYU is a retailer selling televisions. The company is financed wholly by equity.
Why might TYU be exposed to interest rate risk?
- A. TYU's competitors may have fixed rate borrowings.
- B. TYU's cost of capital will vary with interest rates.
- C. Customers' disposable income may change.
- D. TYU's competitors may have variable rate borrowings.
- E. TYU's suppliers may have borrowings.
Answer: C,D,E
NEW QUESTION # 78
Select the most appropriate level of responsibility for managing each of the following risks.
Answer:
Explanation:
NEW QUESTION # 79
A project requires a capital investment of £2.7million. The project will save £450,000 each year after taxation.
Assume the savings are in perpetuity. The business risk of the venture requires a 15% discount rate. The company has to borrow £1million to finance the project at a rate of 9% and the net tax shield is 30%, the project supports debt which generates an interest tax shield of 0.30 x 0.09 x £1million, which is £27,000 per year in perpetuity.
Calculate the project's adjusted present value.
- A. £(30,000)
- B. 0
- C. £600,000
- D. £570,000
Answer: C
NEW QUESTION # 80
G plc has decided to move its production plant to overseas Country A.
This would make the product cheaper to produce. The technology used to make the product is very advanced and some of the staff would have to move to Country A.
The Production Director has identified that there are some political risks in moving to Country A.
Match the methods of reducing the political risks associated with the move to Country A with the corresponding risks.
Answer:
Explanation:
NEW QUESTION # 81
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.
Answer:
Explanation:
NEW QUESTION # 82
YGH has recently completed a post completion audit on a five year contract that has only recently come to a conclusion. The main finding was that the project delivered most of the expected benefits, but that it cost significantly more to implement than had been anticipated at the project appraisal stage. YGH would not have proceeded if the true cost had been known at that stage.
The project was the responsibility of the production department, which is presently managed by G.
When the project was proposed, the production department was managed by H.
H is now YGH's Director of Operations.
How should the finding from this post completion audit be interpreted?
- A. G should be held accountable for the overspend on the project.
- B. YGH should consider introducing more detailed checking of the assumptions underlying the costs of future projects.
- C. H should be held accountable for the overspend on the project.
- D. The production department should not be granted funding for future projects unless there are compelling reasons to proceed.
Answer: B
Explanation:
Explanation
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NEW QUESTION # 83
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. L can now be considered to be an independent non-executive director
- B. Non-executive directors should be responsible for monitoring the performance of executive management especially with regard to company strategy and objectives
- C. The Finance Director should be part of the Audit Committee because of her expertise
- D. None of the executive directors should be allowed to sit on the Remuneration Committee
- E. M and N are both suitable appointees to the Audit Committee
- F. 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.
Answer: B,D,E
NEW QUESTION # 84
V buys vegetables and fruit from three farms located in a different part of V's country and sells them to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal immigrants whose status was used by the factory's owners to force them to work for low wages and in unpleasant conditions. They are forced to live in small overcrowded caravans with no running water. They are also given meals which are cold and poor quality. These farms are located in a developed country with strong labour laws.
Classify each of the following statements as true or false.
Answer:
Explanation:
NEW QUESTION # 85
HGF is a medium-sized manufacturing company its factory and administrative offices are in separate building on the same site. The company uses a wireless network that enables factory and office staff to access systems and to access email.
Which THREE of the following statements are correct?
- A. Networked factory equipment is inherently secure
- B. Security can be assured by encrypting the wi-fi network
- C. All staff should be trained in wi-fi security
- D. An Internal Auditor should drive round the site perimeter to check whether a laptop can detect HGPs wi-fi network
- E. HGF should shield the factory and office buildings and connect them through a wired link
- F. Wi-fi enabled devices should be removed where possible
Answer: B,C,D
NEW QUESTION # 86
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 # 87
CDE an online ticket sales agent, has unwittingly become an accomplice in cyber crime and is suffering attacks on its own business as a result CDE's website was poorly designed and cyber-attackers have managed to inject the site with malware, so that it collects all of CDE's customer log-in information and enables the cyber-attackers to retrieve it.
The cyber-attackers subsequently use this information to set up Botnet agents in the customers' devices which are then used in a Distributed Denial of Service (DDoS) attack whenever very popular tickets are being placed on sale such as international football matches.
The cyber-attackers secure access to a single portal on the site and buy multiple tickets for subsequent sale on the black market while the DDoS causes all other portals to be overloaded preventing real fans acquiring the tickets at face value.
Which TWO of the following apply in this scenario?
- A. CDE will remain just as profitable selling to the black market as to real fans
- B. CDE will need to implement a new firewall to prevent this type of attack.
- C. CDE is likely to lose the ticket franchise for international football events
- D. CDE customers will turn to other ticket sources for their tickets
- E. CDE is likely to face significant fines for the breach.
Answer: B,E
NEW QUESTION # 88
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