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CIMA Exam CIMAPRO19-P03-1 Topic 4 Question 75 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam
Question #: 75
Topic #: 4
[All CIMAPRO19-P03-1 Questions]

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.

Show Suggested Answer Hide Answer
Suggested Answer: A, C, D

by Rosalia at Aug 28, 2024, 02:34 AM

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Delmy
11 months ago
I think the board does not want to be blamed for ignoring a risk, so they are right to instruct the treasurer to put active hedging measures in place.
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Dudley
11 months ago
I believe risk reports can change behavior, so it's crucial for the board to take action.
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Annmarie
11 months ago
C and D seem like the right answers here. The board wants to avoid any potential criticism or blame for not addressing a known risk.
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Claudio
12 months ago
Well, the board is just doing their job by ensuring currency risks are actively managed. Wouldn't want them to get in trouble for not being 'risk-aware' enough.
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Lorenza
11 months ago
C) The board may be concerned it will be criticised if it does not hedge
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Moira
11 months ago
A) Risk reports can change behaviour
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Santos
12 months ago
I agree with Beckie. Risk reporting is important for transparency.
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Janine
12 months ago
Hah, the board is worried about the optics of not hedging. Gotta love how risk management can be more about impression management sometimes.
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Carri
12 months ago
Risk reporting is essential for good governance, but it shouldn't be the sole driver of risk management. The board is just trying to be proactive here.
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Nichelle
11 months ago
C) The board may be concerned it will be criticised if it does not hedge
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Francesco
11 months ago
A) Risk reports can change behaviour
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Hermila
12 months ago
The board wants to cover their own backs by putting active hedging measures in place. I guess they don't want to be the scapegoats if something goes wrong.
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Kiera
11 months ago
D) The board does not want to be blamed for ignoring a risk.
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Frank
11 months ago
C) The board may be concerned it will be criticised if it does not hedge
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Galen
12 months ago
A) Risk reports can change behaviour
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Beckie
1 years ago
I think the board may be concerned it will be criticised if it does not hedge.
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