New Year Sale 2026! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

CIMAPRO19-P03-1 Exam - Topic 6 Question 43 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam
Question #: 43
Topic #: 6
[All CIMAPRO19-P03-1 Questions]

Kis a manufacturing company. It has sourced new equipment from the US to equip a new production facility.

It has to make a payment of USD1,000,000 in3 months' time.

K's production manager needs to know whether it is cheaper to use a forward contract or a money market hedge.

Current spot and forward exchange rates are as follows:

Current mid-point money market rates (annual) are as follows:

Ignoring taxation, which of the following statements is correct?

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

by Tiffiny at Dec 24, 2022, 10:40 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Arlette
4 months ago
I heard the money market hedge is usually more cost-effective.
upvoted 0 times
...
Zona
4 months ago
Definitely leaning towards the forward contract saving GBP2,629.
upvoted 0 times
...
Inocencia
4 months ago
Wait, how can the money market hedge save that much? Sounds off.
upvoted 0 times
...
Rickie
4 months ago
I think the forward contract is the better option here.
upvoted 0 times
...
Maybelle
4 months ago
The money market hedge saves GBP15,196.
upvoted 0 times
...
Crista
5 months ago
I vaguely remember that the money market hedge could save a significant amount, maybe around GBP15,000, but I’m not confident about the exact figure.
upvoted 0 times
...
Hyun
5 months ago
I feel like the forward contract might save more, but I need to double-check the calculations we practiced last week.
upvoted 0 times
...
Natalya
5 months ago
I think we did a similar practice question where the money market hedge was cheaper, but I can't recall the specific numbers we used.
upvoted 0 times
...
Suzan
5 months ago
I remember we discussed forward contracts and money market hedges in class, but I'm not sure how to calculate the exact savings for each option.
upvoted 0 times
...
Mari
5 months ago
This is a good test of my string processing skills. I'm confident I can figure out the right approach here.
upvoted 0 times
...
Glenna
5 months ago
Hmm, I'm a bit unsure about this one. I know we can use the Business Manager to import/export site data, but I'm not sure if that's the right approach here. I'll have to think it through carefully.
upvoted 0 times
...
Chantell
5 months ago
I'll break this down step by step - first calculate EMI, then split interest and principal, and track interest paid in that specific financial year.
upvoted 0 times
...
Clay
5 months ago
I'm leaning towards Option B since it mentions both logging and emailing the admin, but I'm not 100% sure about the Compensating Service Transaction pattern.
upvoted 0 times
...
Lettie
10 months ago
Wait, are we supposed to use the spot rate or the forward rate? I'm so confused, I might just hedge my bets and go with option C.
upvoted 0 times
Leonardo
8 months ago
Sounds good, let's hedge our bets with the forward contract.
upvoted 0 times
...
Gwenn
9 months ago
I agree, let's go with option B then.
upvoted 0 times
...
Clemencia
9 months ago
I think we should use the forward rate for the calculation.
upvoted 0 times
...
...
Sharee
10 months ago
The forward contract saves GBP1,901? That's pocket change! I hope the other options are more substantial.
upvoted 0 times
Lorrine
8 months ago
User 4: Yeah, that seems like a small amount compared to the money market hedge.
upvoted 0 times
...
Viki
8 months ago
User 3: The forward contract saves GBP1,901
upvoted 0 times
...
Rebeca
8 months ago
User 2: That's a significant amount of savings!
upvoted 0 times
...
Tamra
8 months ago
User 1: The money market hedge saves GBP15,196
upvoted 0 times
...
Dacia
8 months ago
User 4: Yeah, that seems like a small amount compared to the money market hedge.
upvoted 0 times
...
Coletta
9 months ago
User 3: The forward contract saves GBP1,901
upvoted 0 times
...
Arlette
9 months ago
User 2: That's a significant amount of savings!
upvoted 0 times
...
Reena
10 months ago
User 1: The money market hedge saves GBP15,196
upvoted 0 times
...
...
Barrett
11 months ago
GBP32,078 saved with the money market hedge? That's a pretty hefty amount. I wonder if there's a catch.
upvoted 0 times
Crista
9 months ago
I agree, it's important to weigh the pros and cons of each option carefully.
upvoted 0 times
...
Jess
9 months ago
True, we should consider all factors before making a decision.
upvoted 0 times
...
Denae
10 months ago
Yeah, but we should also consider any potential risks involved.
upvoted 0 times
...
Socorro
10 months ago
But what if there are hidden costs or risks involved with the money market hedge?
upvoted 0 times
...
Joanna
10 months ago
It does seem like a significant saving with the money market hedge.
upvoted 0 times
...
Ines
10 months ago
I think the money market hedge is the way to go. GBP32,078 in savings is hard to ignore.
upvoted 0 times
...
...
Cammy
11 months ago
Forward contract saves GBP2,629? Hmm, that seems too low. I better review the exchange rates again.
upvoted 0 times
...
Rebecka
11 months ago
The money market hedge saves GBP15,196? I'm not convinced. Let's double-check the calculations.
upvoted 0 times
...
Boris
11 months ago
I'm not sure, but I think the money market hedge saves GBP32,078.
upvoted 0 times
...
Gilma
11 months ago
I disagree, I believe the forward contract saves GBP2,629.
upvoted 0 times
...
Sanda
11 months ago
I think the money market hedge saves GBP15,196.
upvoted 0 times
...

Save Cancel