CIMAPRA19-P03-1 Exam - Topic 2 Question 25 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 25
Topic #: 2

[All CIMAPRA19-P03-1 Questions]

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.

Usingpurchasingpowerparitytheory, what GBP/USD spot rate would you expect to see inthree months' time?

AGBP/USD1.69

BGBP/USD1.73

CGBP/USD1.77

DGBP/USD1.65

Show Suggested Answer

Suggested Answer: A, B, D

by Nana at Mar 24, 2023, 08:53 AM

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Helene

7 months ago

B feels right, but I’m not sure about the 2% UK inflation.

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Martha

7 months ago

I'm leaning towards A, seems realistic.

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Rolf

7 months ago

6% inflation in the USA? That seems high!

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Jestine

7 months ago

I think GBP/USD will actually drop, so D makes sense.

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Herschel

8 months ago

The inflation rates are pretty telling!

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Launa

8 months ago

I feel like the answer should be closer to GBP/USD1.69, but I can't remember the exact formula we used in class.

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Leota

8 months ago

If the UK has lower inflation, the GBP should appreciate against the USD, right? But I'm confused about how much it will change.

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Alona

8 months ago

I think we practiced a similar question where we calculated future exchange rates based on inflation rates. I might need to double-check my calculations.

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Felicidad

8 months ago

I remember that purchasing power parity adjusts for inflation differences, but I'm not sure how to apply it here.

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Marylyn

8 months ago

This seems straightforward - the company is looking to evaluate the success of an email marketing campaign, so the metric that would best capture that is conversions.

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Goldie

8 months ago

Okay, let me break this down step-by-step. I know Blue Prism processes can be exposed as web services, but I'm not sure about business objects. I'll need to double-check that.

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Farrah

8 months ago

I'm a bit confused by the nested loops and the way the variables are being updated. I'll need to take some time to work through this step-by-step.

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Tamera

8 months ago

Hmm, this seems a bit tricky. I'll need to carefully read through the question and think about what the "occurs value" means and how that relates to the input ports.

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Toshia

8 months ago

I'm a little confused by this question. I thought unit tests were more about checking the overall integration of a system, but I guess that's not the case. Let me re-read the options.

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Therese

8 months ago

No problem, I've got this! I'll just plug in the values and calculate the total interest earned over the 6 years.

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Brandon

1 year ago

Expecting the Pound to drop like a rock? Nah, this isn't the 70s, mate. I'd go with B for a more reasonable adjustment.

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Gianna

12 months ago

I would also go with B) GBP/USD1.73 for a more realistic expectation.

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Julieta

12 months ago

I agree, B) GBP/USD1.73 seems like a good choice.

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Arlene

1 year ago

I think B) GBP/USD1.73 is a more reasonable adjustment.

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Olive

1 year ago

This is a classic purchasing power parity problem. I'd be surprised if the answer isn't one of the middle options.

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Jerlene

12 months ago

C) GBP/USD1.77

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Tony

12 months ago

B) GBP/USD1.73

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Benton

1 year ago

A) GBP/USD1.69

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Winifred

1 year ago

Option D seems a bit too extreme, given the inflation rate difference. I'm leaning towards B or C.

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Alease

11 months ago

Yeah, D) GBP/USD1.65 does seem too extreme considering the inflation rates.

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Erasmo

11 months ago

I'm not sure about A) GBP/USD1.69, it seems a bit low.

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Milly

11 months ago

I agree, C) GBP/USD1.77 could also be a good option.

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Fausto

12 months ago

I think B) GBP/USD1.73 is a reasonable choice.

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Gilberto

12 months ago

Yeah, option D seems unlikely. B or C makes more sense given the inflation rates.

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Nichelle

12 months ago

I would go with option B or C as well. Option D does seem too low.

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Edelmira

12 months ago

I'm also leaning towards B or C. The inflation rate difference is significant.

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Cristal

12 months ago

I agree, option D does seem extreme. I think B or C is more likely.

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Kassandra

1 year ago

Hmm, this one's tricky. I'd need to double-check my purchasing power parity calculations, but I think option C looks about right.

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Rutha

1 year ago

I think the GBP/USD spot rate will remain stable at GBP/USD1.71 as the inflation rates are already priced in.

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Latosha

1 year ago

If inflation rates are 2% and 6% respectively, then the GBP should depreciate against the USD. I'd go with option B.

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Nydia

1 year ago

I agree, option B seems like the most logical answer.

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Ligia

1 year ago

I think option B is the best choice.

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Jonelle

1 year ago

I disagree, I believe the GBP/USD spot rate will increase to GBP/USD1.73 due to higher inflation in the USA.

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Andra

1 year ago

I think the GBP/USD spot rate will decrease to GBP/USD1.69 in three months.

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