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AIWMI CCRA-L2 Exam - Topic 2 Question 91 Discussion

''Following four entities operate in the Indian IT and BPO space. They all are into same segment of providing off-shore analytical services. They all operate on the labour cost-arbitrage in India and the countries of their clients. Following information pertains for the year ended March 31, 2013.The year FY13, was typically a good year for Indian IT companies. For FY14, the economic analysts have given following predictions about the IT Industry:A) It is expected that INR will appreciate sharply against other USD.B) Given high inflation and attrition in IT Industry in India, the wages of IT sector employees will increase more sharply than Inflation and general wage rise in country.C) US Congress will be passing a bill which restricts the outsourcing to third world countries like India.While analyzing the four entities, you come across following findings related to Glowing:Glowing is promoted by Mr.M R Bhutta, who has earlier promoted two other business ventures, He started with ABC Entertainment Ltd in 1996 and was promoter and MD of the company. ABC was a listed entity andits share price had sharp movements at the time of stock market scam in late 1990s. In 1999, Mr.Bhutta sold his entire stake and resigned from the post of MD. The stock price declined by about 90% in coming days and has never recovered. Later on in 2003, Mr.Bhutta again promoted a new business, Klear Publications Ltd (KCL) an in the business of magazine publication. The entity had come out with a successful IPO and raised money from public. Thereafter it ran into troubles and reported losses. In 2009, Mr.Bhutta went on to exit this business as well by selling stake to other promoter(s). There have been reports in both instances with allegations that promoters have siphoned off money from listed entities to other group entities, however, nothing has been proved in any court.''Which of the following risks do not exist for Indian IT industry?
A) Raw material price risk, Exchange rate Risk
B) Interest rate risk, Skilled Manpower Risk
C) Exchange Rate Risk, Interest rate risk
D) Domestic and international regulatory risk, technological risk

AIWMI CCRA-L2 Exam - Topic 2 Question 91 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 91
Topic #: 2
[All CCRA-L2 Questions]

''Following four entities operate in the Indian IT and BPO space. They all are into same segment of providing off-shore analytical services. They all operate on the labour cost-arbitrage in India and the countries of their clients. Following information pertains for the year ended March 31, 2013.

The year FY13, was typically a good year for Indian IT companies. For FY14, the economic analysts have given following predictions about the IT Industry:

A) It is expected that INR will appreciate sharply against other USD.

B) Given high inflation and attrition in IT Industry in India, the wages of IT sector employees will increase more sharply than Inflation and general wage rise in country.

C) US Congress will be passing a bill which restricts the outsourcing to third world countries like India.

While analyzing the four entities, you come across following findings related to Glowing:

Glowing is promoted by Mr.M R Bhutta, who has earlier promoted two other business ventures, He started with ABC Entertainment Ltd in 1996 and was promoter and MD of the company. ABC was a listed entity and

its share price had sharp movements at the time of stock market scam in late 1990s. In 1999, Mr.Bhutta sold his entire stake and resigned from the post of MD. The stock price declined by about 90% in coming days and has never recovered. Later on in 2003, Mr.Bhutta again promoted a new business, Klear Publications Ltd (KCL) an in the business of magazine publication. The entity had come out with a successful IPO and raised money from public. Thereafter it ran into troubles and reported losses. In 2009, Mr.Bhutta went on to exit this business as well by selling stake to other promoter(s). There have been reports in both instances with allegations that promoters have siphoned off money from listed entities to other group entities, however, nothing has been proved in any court.''

Which of the following risks do not exist for Indian IT industry?

Show Suggested Answer Hide Answer
Suggested Answer: A

by Marti at Jun 28, 2024, 09:56 PM

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Markus
10 months ago
I think interest rate risk is overblown in this context.
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Anabel
10 months ago
Exchange rate risk is always a concern for IT firms.
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Adelle
10 months ago
Wait, are they really gonna restrict outsourcing? Sounds fishy.
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Dalene
10 months ago
Totally agree, wage hikes are inevitable with inflation.
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Jolene
11 months ago
The INR appreciation could really impact profits.
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Laurena
11 months ago
I thought interest rate risk was more relevant to financial institutions, but I guess it could still affect IT companies indirectly.
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Abraham
11 months ago
I feel like we had a practice question about regulatory risks in the IT sector, and it seems like they could be significant, especially with the potential outsourcing restrictions.
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Vallie
11 months ago
I’m not entirely sure, but I think raw material price risk might not apply to IT services since they don’t deal with physical goods.
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Thora
11 months ago
I remember we discussed how exchange rate risk is a big concern for IT companies, especially with the INR fluctuations.
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Izetta
11 months ago
This question requires a good understanding of the Indian IT industry and the potential risks it faces. I'll need to carefully analyze the information provided and the predictions to determine which risks are not applicable. I don't want to rush into an answer, as that could lead to a mistake.
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Marg
11 months ago
Okay, let's see. The question mentions raw material price risk, exchange rate risk, interest rate risk, skilled manpower risk, domestic and international regulatory risk, and technological risk. Based on the predictions given, it seems that exchange rate risk and interest rate risk are the ones that do not exist for the Indian IT industry. I'll go with option C.
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Sommer
11 months ago
Hmm, this is a tricky one. The question mentions several potential risks, but I'm not sure which ones don't apply to the Indian IT industry. I'll need to carefully review the information and options to make the right choice.
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Barrie
11 months ago
This seems like a straightforward question about risks in the Indian IT industry. I'll focus on analyzing the given information and predictions to identify the risks that do not exist.
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Melodie
12 months ago
Hmm, this one seems straightforward. I think I'll go with option B - it seems to capture the essence of value stream mapping pretty well.
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Salome
12 months ago
Okay, I've got this. Broadcast and multicast are the two modes that would work best for transmitting data to real-time displays. Broadcast sends to all devices, while multicast sends to a specific group. Those seem like the logical choices for this scenario.
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Tammy
12 months ago
This is a tricky one. I need to make sure I fully understand the details of the email attack process and how it's impacting the company's PR response. Identifying the root cause and then selecting the appropriate incident handling steps will be crucial.
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Selma
12 months ago
Hmm, I'm a bit unsure about this one. There are a few different things the new manager could focus on. I'm leaning towards option D, working with the sponsor to identify benefits sustainment and measures of success. That seems important for ensuring the project has a lasting impact.
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Quentin
1 year ago
This question is a real brain-teaser! The information about the promoter's past ventures is intriguing, but I'm going to try to stay focused on the key risks facing the Indian IT industry. Based on the predictions provided, I think the correct answer is C) Exchange Rate Risk, Interest rate risk.
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Sharee
1 year ago
The question mentions that the IT industry in India is facing high inflation and attrition, which could lead to sharp increases in employee wages. I think this would fall under the 'Skilled Manpower Risk' category, so I'll mark that as one of the risks that exist for the Indian IT industry.
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Gladis
1 year ago
Ha! The promoter of Glowing, Mr. Bhutta, seems like quite the serial entrepreneur. Promoting and exiting businesses like they're going out of style. I wonder if he's got a business card that says 'Professional Promoter' on it.
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Mariko
1 year ago
User 3
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Sheron
1 year ago
C) Exchange Rate Risk, Interest rate risk
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Celeste
1 year ago
B) Interest rate risk, Skilled Manpower Risk
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Tiara
1 year ago
User 2
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Linsey
1 year ago
A) Raw material price risk, Exchange rate Risk
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Frederic
1 year ago
User 1
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Keshia
1 year ago
The question provides a lot of background information on the promoters of one of the entities, Glowing. While this is interesting, I'm not sure how relevant it is to answering the question about the risks facing the Indian IT industry. I'll focus on the key information provided in the question.
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Lina
1 year ago
D) Domestic and international regulatory risk, technological risk
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Lina
1 year ago
B) Interest rate risk, Skilled Manpower Risk
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Lina
1 year ago
A) Raw material price risk, Exchange rate Risk
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Alease
1 year ago
I believe option A) Raw material price risk, Exchange rate Risk are the risks that do not exist for Indian IT industry.
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Jacqueline
1 year ago
This exam question seems to focus on the risks facing the Indian IT industry. I think the correct answer is C) Exchange Rate Risk, Interest rate risk, as the question states that the Indian rupee is expected to appreciate sharply against the US dollar, and the IT industry is not directly impacted by interest rate fluctuations.
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Lelia
1 year ago
User 2
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Lashanda
1 year ago
User 1
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Madelyn
1 year ago
I agree with you. Those risks are not as relevant in the IT industry.
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Gail
1 year ago
I think option C) Exchange Rate Risk, Interest rate risk do not exist for Indian IT industry.
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