CIMAPRA19-F03-1 Exam - Topic 5 Question 79 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 79
Topic #: 5

[All CIMAPRA19-F03-1 Questions]

Which THREE of the following statements are true of a money market hedge?

AThey offer roughly the same outcome as a forward contract.

BThey leave the company exposed to currency risks.

CThey may be a little more flexible in comparison to a forward contract.

DThey are more complex than forward contracts.

EThey are easy to set up.

Show Suggested Answer

Suggested Answer: A, B, D

by Lorrine at Jan 27, 2024, 11:18 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Lizbeth

6 months ago

Easy to set up? Not sure about that one.

upvoted 0 times

...

Krystal

6 months ago

C sounds right, flexibility is key!

upvoted 0 times

...

Marjory

7 months ago

Wait, are they really more complex?

upvoted 0 times

...

Marsha

7 months ago

I think B is misleading, they can reduce exposure.

upvoted 0 times

...

Eva

7 months ago

A and D are definitely true!

upvoted 0 times

...

Micaela

7 months ago

D seems likely to be correct because I remember money market hedges being described as more complex than forward contracts in our practice questions.

upvoted 0 times

...

Buck

7 months ago

I remember discussing that C might be true since money market hedges can offer some flexibility, but I can't recall the specifics.

upvoted 0 times

...

Kati

8 months ago

I'm not so sure about B; I thought money market hedges were supposed to reduce currency risk, not expose the company to it.

upvoted 0 times

...

Lisbeth

8 months ago

I think option A is true because money market hedges are designed to provide similar outcomes to forward contracts, right?

upvoted 0 times

...

Johnetta

8 months ago

I remember learning about money market hedges in class, but I'm a bit fuzzy on the details. I'll need to think this through step-by-step to make sure I get the right three statements.

upvoted 0 times

...

Lenny

8 months ago

Okay, let me see. I know money market hedges offer some flexibility, but I'm not sure if they're more complex than forwards. I'll have to weigh each option carefully.

upvoted 0 times

...

Quentin

8 months ago

I'm pretty confident I know the key differences between money market hedges and forward contracts, so I'll carefully review each statement to determine which three are true.

upvoted 0 times

...

Herman

8 months ago

Hmm, this is a tricky one. I'll need to think through the pros and cons of money market hedges compared to forward contracts to figure out which statements are accurate.

upvoted 0 times

...

Youlanda

8 months ago

Hmm, I'm a bit confused. The question mentions displaying the result and the label, but none of the options seem to address both of those requirements. I'll need to think this through a bit more.

upvoted 0 times

...

Mitzie

8 months ago

I'm pretty sure the Lubridate package is the one that makes working with dates in R easy. I've used it before and it has a lot of helpful functions.

upvoted 0 times

...

Octavio

8 months ago

Option D seems like the safest bet. All of the statements appear to support recommended service modeling practices, so I'd feel confident selecting that one.

upvoted 0 times

...