Deal of The Day! 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

CIPS L4M4 Exam - Topic 3 Question 7 Discussion

Philip is a procurement manager at XYZ Company which imports raw materials from abroad. Sup-pliers provide quotes to Philip in their local currency. Is this the best way to reduce the risk to XYZ Company of currency fluctuations?
C) no- quoting in the supplier's currency increases the risk for the buyer
A) yes- this means the price won't go up or down
B) yes- this puts the risk on the supplier
D) no- quoting in the supplier's currency does not affect the risk to the buying organisation

CIPS L4M4 Exam - Topic 3 Question 7 Discussion

Actual exam question for CIPS's L4M4 exam
Question #: 7
Topic #: 3
[All L4M4 Questions]

Philip is a procurement manager at XYZ Company which imports raw materials from abroad. Sup-pliers provide quotes to Philip in their local currency. Is this the best way to reduce the risk to XYZ Company of currency fluctuations?

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 Glendora at Apr 12, 2024, 09:33 PM

Limited Time Offer

25%

Off

Get Premium L4M4 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Vilma
9 months ago
I thought it would stabilize prices, but now I'm not so sure.
upvoted 0 times
...
Cassandra
9 months ago
Definitely not the best way to manage currency risk!
upvoted 0 times
...
Eugene
10 months ago
Wait, isn't it risky for us if the currency fluctuates?
upvoted 0 times
...
Tequila
10 months ago
I think it actually shifts the risk to the supplier, right?
upvoted 0 times
...
Annabelle
10 months ago
Quoting in local currency can lead to more unpredictable costs.
upvoted 0 times
...
Shelton
10 months ago
I thought quoting in the supplier's currency was risky for the buyer, but I can't recall the exact details from my notes.
upvoted 0 times
...
Olive
11 months ago
I'm not entirely sure, but I feel like if the supplier quotes in their currency, it might shift the risk away from the buyer.
upvoted 0 times
...
Alison
11 months ago
I think I practiced a question similar to this, and it suggested that having quotes in the buyer's currency might be safer.
upvoted 0 times
...
Dalene
11 months ago
I remember discussing how quoting in the supplier's currency could actually expose the buyer to more risk, especially if the exchange rates fluctuate.
upvoted 0 times
...
Wilda
11 months ago
This question is testing our understanding of currency risk management. I'll need to carefully weigh the pros and cons of the different options to determine the best approach for the buyer.
upvoted 0 times
...
Agustin
11 months ago
I'm pretty confident I know the answer to this one. Quoting in the supplier's currency actually increases the risk for the buyer, so that's not the best way to reduce currency risk.
upvoted 0 times
...
Tomas
11 months ago
Okay, I think I've got a handle on this. The key is to consider who bears the risk of currency fluctuations when the supplier quotes in their local currency.
upvoted 0 times
...
Jackie
11 months ago
Hmm, I'm a bit confused on this one. I'll need to review the concepts around currency risk and how that impacts the buyer versus the supplier.
upvoted 0 times
...
Dino
11 months ago
This seems like a tricky one. I'll need to think carefully about the risks involved in currency fluctuations and how that affects the buyer.
upvoted 0 times
...
Golda
11 months ago
Okay, I think the key here is making sure the information gathered is accurate and consistent with other sources. That's why option D seems like the best choice.
upvoted 0 times
...
Lindsey
11 months ago
Option C looks sketchy - saying someone is 'most likely' guilty isn't professional language for a forensic report.
upvoted 0 times
...
Chery
11 months ago
Okay, I think I've got this. The key is to split the mirror, remove the disk, and then mount it under a new file system. Option D looks like the right approach, but I'll verify the steps before submitting.
upvoted 0 times
...
Werner
11 months ago
This seems like a straightforward question about project management knowledge areas. I'll review my notes on the human resource management knowledge area to identify the correct answer.
upvoted 0 times
...
Colton
2 years ago
Yes, it's the best way to reduce the risk for XYZ Company.
upvoted 0 times
...
Stefania
2 years ago
So, should Philip continue to ask for quotes in the supplier's local currency?
upvoted 0 times
...
Frederick
2 years ago
I believe quoting in the supplier's currency does not affect the risk to the buying organization.
upvoted 0 times
...
Estrella
2 years ago
That's true, but it puts all the risk on the supplier.
upvoted 0 times
...
Yesenia
2 years ago
But doesn't it also mean the price won't go up or down, decreasing uncertainty?
upvoted 0 times
...
Martha
2 years ago
I think quoting in the supplier's currency increases risk for XYZ Company.
upvoted 0 times
...
Benedict
2 years ago
I see your point, Putting the risk on the supplier could protect XYZ Company from currency fluctuations.
upvoted 0 times
...
Lindsey
2 years ago
But wouldn't shifting the risk to the supplier be better? That's what option B suggests.
upvoted 0 times
...
Billye
2 years ago
I agree with it makes sense that the risk would be higher if the quote is in the supplier's currency.
upvoted 0 times
...
Peggie
2 years ago
I think quoting in the supplier's currency increases the risk for the buyer.
upvoted 0 times
...
Raymon
2 years ago
Whoa, hold on a minute. Didn't we just establish that quoting in the supplier's currency could increase the risk? I'm pretty sure option C is the correct answer here.
upvoted 0 times
...
Kirk
2 years ago
You know, I'm starting to think option D might be the way to go. If quoting in the supplier's currency doesn't affect the risk, then that might be the simplest and most straightforward approach.
upvoted 0 times
Kathrine
2 years ago
Actually, option C makes sense. It's better to avoid currency fluctuations.
upvoted 0 times
...
Jerlene
2 years ago
But won't quoting in the supplier's currency increase the risk for the buyer?
upvoted 0 times
...
Lenna
2 years ago
I think option D is a safe choice.
upvoted 0 times
...
...
Richelle
2 years ago
Hold up, are we sure option A is right? I mean, just because the price won't go up or down doesn't mean the risk is eliminated. Currency fluctuations could still have a big impact on the bottom line.
upvoted 0 times
...
Zachary
2 years ago
Hmm, I'm not so sure. Couldn't quoting in the supplier's currency help the buying organization hedge against currency fluctuations? That's what option A seems to be implying.
upvoted 0 times
...
Daniel
2 years ago
I agree, it's not as straightforward as it seems. Quoting in the supplier's currency could actually increase the risk for the buying organization, as option C suggests.
upvoted 0 times
...
Lawrence
2 years ago
I think this is a tricky question. On the surface, option B seems like the best choice since it puts the risk on the supplier. But I'm not sure that's the full story here.
upvoted 0 times
...

Save Cancel