CIMAPRA19-P03-1 Exam - Topic 6 Question 7 Discussion

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

Question #: 7
Topic #: 6

JKL makes large export sales to customers in country X, whose currency fluctuates significantly against JKL's home currency JKL also makes large purchases from suppliers in countrrOC All of these transactions are in country X's currency

JKL's treasurer does not actively hedge currency risks because there is a natural hedge in place due to the company making both sales and purchases in the same currency

JKL's board has instructed the treasurer to put active hedging measures in place because the risk report would otherwise have to disclose the fact that JKL has a currency risk which is not actively hedged

Which of the following statements are correct? Select ALL that apply.

ARisk reports can change behaviour

BRisk reporting is a bad thing

CThe board may be concerned it will be criticised if it does not hedge

DThe board does not want to be blamed for ignoring a risk.

ERisk reporting drives the whole risk management process

Show Suggested Answer

Suggested Answer: A, C, D

by Lenna at May 05, 2022, 02:00 PM

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Rosann

4 months ago

Yeah, they don't want to be blamed for a currency mess!

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Tenesha

4 months ago

The board probably fears backlash if they ignore the risk.

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Adell

4 months ago

Not sure if risk reporting is always a good thing...

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Hoa

4 months ago

Totally agree, the board's just covering their bases.

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Lai

5 months ago

Risk reports can definitely change behavior.

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Ernestine

5 months ago

Hmm, this looks like a tricky one. I'll need to think through the incident handling process steps carefully to determine which one is being described here.

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Maxima

5 months ago

I'm pretty sure this is about nominal group technique. It helps get structured input from everyone without the loudest voices dominating.

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Jolene

5 months ago

Hmm, I'm a bit unsure about some of these options. I'll need to think carefully about which ones are actually part of a formal strategic planning process.

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Sharika

5 months ago

Hmm, I'm a little unsure about this one. I know firewalls and VPNs are designed to protect individual computers, but I'm not sure if that applies to the other options. I'll have to think this through carefully.

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Karol

5 months ago

I wonder if we need to focus on the subject line as a criterion. I don't recall if that was emphasized in any of the examples we worked on.

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