Free Sample Questions to Practice P3 Certification Test Engine [Jul-2023]
2023 Valid P3 Real Exam Questions, practice CIMA Strategic Level Case Study Exam
Another important aspect of the CIMA P3 Exam is its emphasis on risk reporting and communication. P3 exam focuses on the importance of effective communication in risk management, including how to report risks to stakeholders and how to communicate risk management strategies to different audiences. This not only helps students develop their communication skills but also enables them to build trust and credibility with stakeholders, which is critical for organizational success. Overall, the CIMA P3 Exam is an important module in the CIMA qualification, providing students with essential skills and knowledge needed to effectively manage risks in organizations.
NEW QUESTION # 52
A project has an NPV of £1,200,000. The present value of material costs which are included in the NPV calculation are £8,000,000.
What is the sensitivity of the project to changes in material costs?
Give your answer to the nearest whole percentage.
Answer:
Explanation:
15%
NEW QUESTION # 53
With regard to the rote of the audit committee which of the following statements are correct? Select ALL that apply
- A. The audit committee should design the system of internal controls
- B. The audit committee should decide annually whether it needs an internal audit function
- C. The audit committee should review and monitor the effectiveness of the company's internal audit function
- D. The audit committee should decide annually whether it needs an external audit function
- E. The audit committee should engage consultants to carry out business reviews
- F. The audit committee should provide arrangements for whistle blowing
Answer: C,E,F
NEW QUESTION # 54
P is a consulting firm that provides technical advice to the oil industry. The company has consulting teams that specialise in specific areas, namely drilling, off-shore, health and safety, oil well management and ng management. Each team's consultants are charged out to clients at the same daily rate.
The demand for different skill sets varies constantly due to factors such as movements in oil prices.
Exploration increases when the oil price rises and there is a greater focus on maintaining existing wells when the price fans.
The performance of P's sales team is measured in terms of revenue, based on the number of consultancy days sold Frequently the sales team agree to contracts without first checking that the relevant consulting team has consultants available. The work then has to be undertaken by subcontractors at P's expense. Sub-contractors cost more and their use can also lead to P's own consultants being under-utilised when assignments could have been scheduled more efficiently.
Which TWO of the following would correct this behavior?
- A. Reduce the number of consultants within P's teams.
- B. Allow P's consultants to go out on any job, regardless of specialism.
- C. Award additional incentives for selling P's own staff
- D. Measure the performance of P's sales team on margin contribution rather than revenue.
- E. Employ the sub-contractor stall as lull time P employees.
Answer: C,D
NEW QUESTION # 55
Company M has lost 25% of its revenue in the last three months due to bad debts. One of the receivables written off was from a long standing customer and the other three were from new customers. The management accountant has warned the sales team that the company cannot survive any more substantial bad debts.
Which of the following internal controls should be put in place to try and prevent further bad debts?
- A. As soon as a customer payment is overdue they should not be allowed to purchase more until their balance has been reduced.
- B. Two sales staff must authorise new customers and sign a form stating that they have done so.
- C. An aged analysis of customer balances must be reviewed every month.
- D. A credit check should be carried out on each new customer.
- E. Credit limits should be set for all customers. However, if the credit limit will cost a sale then sales staff can override this limit.
Answer: A,C,D
NEW QUESTION # 56
Select the correct ethical principle that corresponds to each ethical dilemma described.
Answer:
Explanation:
NEW QUESTION # 57
Under the COSO Enterprise Risk Management Framework, who is responsible for risk management?
- A. Every member of the entity.
- B. The shareholders.
- C. Managers and directors only.
- D. The board of directors only.
Answer: A
NEW QUESTION # 58
The Head of IT Security has been asked to conduct a detailed forensic analysis of a suspected data breach that ted to customer credit card details being intercepted.
Which TWO of the following would be suitable objectives for such a forensic analysis?
- A. Developing an understanding of the vulnerabilities that led to the breach
- B. The collection of evidence that can be used to convict the perpetrators of the breach.
- C. Recovering the stolen credit card details before they can be abused by criminals
- D. Identifying customers whose details have been stolen
- E. Preventing the credit card companies from blaming the entity for fraudulent charges
Answer: A,D
NEW QUESTION # 59
J plc is a wholesale building supply business. It has a large warehouse where some of its materials are stored.
Last month three accidents occurred where employees were slightly injured whilst moving items from the 5th shelf. The 5th shelf is located 15 metres up from the ground.
This is a health and safety risk and could also be a reputation risk in the longer term.
Which of the following risk mitigations should the company employ?
- A. Transfer by insuring against this risk.
- B. Accept by just accepting this is a risk the company has to take and some employees may get injured.
- C. Avoid by sending the employees on a training course on Health and Safety.
- D. Reduce by storing some items on the first three shelves and storing other items outside.
Answer: D
NEW QUESTION # 60
B is a small retail bank that offers customers many on-the services B is keen to ensure sound security both to protect the bank's assets and also to safeguard customer privacy B's IT Security Manager has suggested that the bank should use two phase authentication for access to the on-line systems Which TWO of the following are examples of two phase authentication?
- A. Customer passwords must contain both letters and numbers and must be changed regularly.
- B. Customers must input a valid user name and then input a password user name first input a password and then a pin number
- C. Customers first input a password and then use a card or token to gain access
- D. Customers first input a password and then receive an access code via email or text message that also has to be input
Answer: A,D
NEW QUESTION # 61
Which of the following statements concerning the use of balanced scorecards to measure divisional performance is correct?
- A. Dysfunctional behaviour is more difficult than under traditional reporting because a wide range of factors will be measured and reported.
- B. The input for balanced scorecard reports comes from many sources so it is not possible to misrepresent performance.
- C. Dysfunctional behaviour is impossible because divisional managers are evaluated on so many different decisions.
- D. Contradictory and inconsistent targets prevent balanced scorecards being a useful tool for performance evaluation.
Answer: A
NEW QUESTION # 62
Return on capital employed (ROCE) can be a useful measure of divisional performance. For which of the following types of company is ROCE likely to be most appropriate?
- A. Companies in which there is extensive investment in intellectual property and intangible assets, such as brands and trade marks.
- B. Companies in the not-for-profit sector.
- C. Companies in which there is extensive investment in physical assets, such as plant and machinery, with divisions which undertake broadly similar activities.
- D. Companies which have been created by extensive acquisition and merger activity and include divisions engaged in a variety of activities.
Answer: C
NEW QUESTION # 63
A UK based company is considering an investment of GB£1,000,000 in a project in the USA. It is anticipated that the following cash flows will arise from this project.
The cash flows will be either US$400,000 with a probability of 40% or US$700,000 with a probability of 60% for each of the next three years; remitted to the UK at the end of each year.
Currently GB£1.00 is worth US$1.30.
The expected inflation rates in the two countries over the next four years are 2% in the UK and 4% in the US.
Applying the Purchasing Power Parity Theory, which of the following represents the expected net present value of the project in GP£ (to the nearest whole pound)?
- A. GB£(111,973)
- B. GB£391,640
- C. GB£554,047
- D. GB£287,639
Answer: D
NEW QUESTION # 64
HGY is a major global corporation that has decided to implement the COSO Enterprise Risk Management Framework and integrate management practices throughout the organisation Which THREE of the following would be appropriate for HGY?
- A. Authorise managers and supervisors to respond immediately to any risks that emerge
- B. Identify risk as an element of HGY's overall strategy.
- C. Train staff at all levels to identify and report risks to their superiors
- D. Make risk management an element of everyone's responsibility
- E. Create a risk management team that will take responsibility for identifying and mitigating risk
- F. Recruit a Director of Risk, who will lead risk management procedures.
Answer: B,D,E
NEW QUESTION # 65
Match the descriptions shown in the boxes below with the method of quantifying risk exposure it best describes.
Answer:
Explanation:
NEW QUESTION # 66
Select the most appropriate level of responsibility for managing each of the following risks.
Answer:
Explanation:
NEW QUESTION # 67
CVB is a major chain of pharmaceutical retailers that is quoted on its home stock exchange.
CVB's Chief Executive Officer (CEO) persuaded a former school friend to join CVB's Board as Non-executive Chair It is not widely known that the two have been lifelong friends. The Chair tends to defer to the CEO on all matters arising at Board meetings Which of the following statements are correct?
Select ALL that apply.
- A. The Chair should have declared an interest and refused this appointment
- B. CVB's shareholders are likely to be misled over the quality of governance
- C. This friendship does not matter because the CEO and Chair would become friends anyway
- D. The presence of the other non-executives will ensure sound governance
- E. There will be a major corporate scandal relating to CVB
Answer: A,B
NEW QUESTION # 68
Which of the following best describes the relevance of value at risk (VaR) as a decision tool?
- A. VaR quantifies past volatility
- B. VaR quantifies future volatility
- C. VaR can only measure downside risk
- D. VaR quantifies the maximum loss that could ever be incurred
Answer: A
NEW QUESTION # 69
SQH manufactures mobile phones SQH's Board is currently undertaking a long-term planning exercise as part of the process of strategy development The Board is considering expanding the number of countries it currently exports products to.
Which THREE of the following could cause difficulty in forecasting accurately'?
- A. Long-term trends may be difficult to predict in this market
- B. Currency changes in new and existing markets
- C. Competitors will have a better understanding of potential new markets
- D. Pressures on management to achieve short-term results
- E. Rapidly changing mobile phone technology.
Answer: A,B,E
NEW QUESTION # 70
M plc has a $2 million loan outstanding on which the interest rate is reset every 6 months for the following 6 months and the interest is payable at the end of that 6-month period. The next 6-monthly reset period starts in
3 months and the treasurer of M plc thinks that interest rates are likely to rise between now and then.
Current 6-month rates are 7.2% and the treasurer can get a rate of 7.7% for a 6-month forward rate agreement (FRA) starting in 3 months' time. By transacting an FRA the treasurer can lock in a rate today of 7.7%.
If interest rates are 8.5% in 3 months' time, what will the net amount payable be?
Give your answer to the nearest thousand dollars.
Answer:
Explanation:
$77000
NEW QUESTION # 71
A government department is conducting a value for money audit on a school.
The school's pupils sit leaving exams. Classify each of the audit tests as either economy and efficiency or effectiveness.
Answer:
Explanation:
NEW QUESTION # 72
GHJ makes large export sales to customers in Country A, whose currency fluctuates significantly against GHJ's home currency. GHJ also makes large purchases from suppliers in Country A.
All of these transactions are in Country A's currency.
GHJ'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.
GHJ'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 GHJ has a currency risk which is not actively hedged.
Which of the following statements are correct?
- A. The Board does not want to be blamed for ignoring a risk.
- B. Risk reports can change behaviour.
- C. Risk reporting drives the whole risk management process.
- D. Risk reporting is a bad thing.
- E. The Board may be concerned it will be criticised if it does not hedge.
Answer: A,B,E
NEW QUESTION # 73
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Topics of the CIMA P3: Risk Management Exam
CIMA P3 exam dumps included the following topics:
- Enterprise risk
- Strategic risk
- Internal controls
- Cyber risks
To prepare for the CIMA P3 certification exam, candidates can take advantage of a variety of resources, including study materials, practice exams, and online courses. These resources can help candidates develop the knowledge and skills needed to pass the exam and achieve their career goals in risk management.
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