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CIPS L4M4 Exam - Topic 3 Question 17 Discussion

For what type of purchase would you use a Futures Exchange?
C) Commodity
A) Tail Spend
B) Capital Expenditure
D) High value, high risk

CIPS L4M4 Exam - Topic 3 Question 17 Discussion

Actual exam question for CIPS's L4M4 exam
Question #: 17
Topic #: 3
[All L4M4 Questions]

For what type of purchase would you use a Futures Exchange?

Show Suggested Answer Hide Answer
Suggested Answer: C

The correct answer is 'no- quoting in the supplier's currency increases the risk for the buyer'. This questions comes up in a variety of formats in the exam. Remember; if the price is in your own currency (most examples in the exam are given in ) there is less risk than if the prices are quoted in a foreign currency. This is because exchange rates fluctuate; if the price is in you always know what you're paying, if it's in another currency the price can change daily depending on if the exchange rate compared to has gone up or down.


by Tuyet at Aug 06, 2024, 05:35 AM

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Verda
9 months ago
Tail Spend? That doesn’t sound right at all.
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Krystal
9 months ago
High value, high risk could also apply, but C seems more accurate.
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Herschel
10 months ago
Wait, are we sure about that?
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Crissy
10 months ago
I agree, C is the right choice.
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Gayla
10 months ago
Definitely for Commodity purchases!
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Franklyn
10 months ago
I definitely recall that futures are linked to commodities, but I wonder if there are exceptions for other types of purchases.
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Royal
11 months ago
I’m a bit confused; I thought futures could also relate to high-value purchases, but I guess that’s more about risk management?
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Claudia
11 months ago
I remember practicing a question about futures and commodities in class, so I feel like C is the right answer here.
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Winfred
11 months ago
I think futures exchanges are mainly used for commodities, but I'm not entirely sure if they apply to other types of purchases too.
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Christiane
11 months ago
I'm a little confused by this question. Futures exchanges are used for all kinds of financial instruments, not just commodities. I'll have to review my notes to make sure I understand the specific use cases for futures exchanges.
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Jacki
11 months ago
Okay, I've got this. Futures exchanges are used for trading commodities like oil, gold, or agricultural products. That's the type of purchase you'd use a futures exchange for. I'm confident that option C is the correct answer.
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Kristofer
11 months ago
Hmm, I'm a bit unsure about this one. Futures exchanges are used for trading commodities, right? But I'm not sure if that's the only type of purchase they're used for. Let me think this through.
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Celestina
11 months ago
This seems like a straightforward question about futures exchanges. I'll think through the options carefully and try to recall what I've learned about how futures exchanges work.
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Nieves
11 months ago
Okay, let me think this through. The key here is that file hashes can help identify malware even if the file name changes. That's gotta be the main benefit they're looking for. I'll go with option B.
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Justine
11 months ago
I'm pretty sure the Scrum-of-Scrums meeting is about coordinating the work of multiple Scrum teams. That sounds like the most logical objective to me.
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King
1 year ago
Futures exchanges? More like Futures Guesses if you ask me. I'll take a wild stab at C) Commodity.
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Vincent
1 year ago
I heard a trader once tried to futures contract a unicorn. Needless to say, it didn't end well.
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Janessa
1 year ago
C) Commodity
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Galen
1 year ago
B) Capital Expenditure
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Michel
1 year ago
A) Tail Spend
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Dorothy
1 year ago
B) Capital Expenditure? Are you kidding me? Futures are all about speculating on commodity prices, not buying equipment. C) Commodity is the way to go.
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Micaela
1 year ago
B) Well, I guess there are different ways to utilize Futures Exchange.
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Wilda
1 year ago
D) High value, high risk purchases can also benefit from using Futures Exchange.
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Cordell
1 year ago
C) I agree, investing in commodities can be quite profitable.
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King
1 year ago
A) Tail Spend is also a common use for Futures Exchange.
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Son
1 year ago
A) Tail Spend? Really? Futures exchanges are for big-ticket items, not office supplies. I think I'll go with C) Commodity.
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Lyda
1 year ago
C) Commodity
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Glennis
1 year ago
A) Tail Spend? Really? Futures exchanges are for big-ticket items, not office supplies.
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Glory
1 year ago
I'm going with D) High value, high risk. Futures trading can be pretty risky, so that seems like the most accurate description.
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Billye
1 year ago
Definitely C) Commodity. That's what futures exchanges are all about - trading commodities like wheat, oil, gold, etc.
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Victor
1 year ago
That's true. It's important to do your research and understand the market before getting involved.
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Albina
1 year ago
I've heard it can be quite risky though, especially if you're not careful with your investments.
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Daron
1 year ago
Yes, you're right. It's a way to hedge against price fluctuations in those commodities.
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Ligia
1 year ago
C) Commodity. That's what futures exchanges are all about - trading commodities like wheat, oil, gold, etc.
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Ocie
1 year ago
I believe Futures Exchange is not suitable for tail spend or capital expenditure.
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Remedios
1 year ago
I agree with Rodolfo, Futures Exchange is commonly used for commodities.
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Rodolfo
1 year ago
I think you would use a Futures Exchange for commodities.
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