Free P3 Risk Management (Online) Exam CIMAPRA19-P03-1 Exam Practice Test

Which of the followingactionswouldbreachCIMA's Code of Ethics for Professional Accountants?

• An accountant has been asked to evaluate an investment opportunity that is open for a very short time. The accountant has recommended rejecting the opportunity without doing any evaluation because he was too busy to study the proposal properly.
• An accountant has been asked to select a new supplier and has decided to recommend a supplier based in country A because that will give the accountant an excuse to visit a family member who lives there.
• An accountant has been asked to confirm that a complex financial instrument that has been recommended by the bank is suitable for the company. The accountant does not understand the instrument, but has confirmed its suitability because senior management wishes to use it.
• An accountant has been asked to compile a list of all contacts at the company's bank so that they can be included in the mailing list for the calendar and coffee mug that are distributed as business gifts by the company in December of every year.
• An accountant has been asked to identify the two least profitable factories so that they can be closed down, with the loss of all jobs. All of the company's factories are located in areas of high unemployment.

C is a large international supermarket chain. It has many thousands of suppliers and many thousands of potential suppliers competing for shelf space m its supermarkets.Which of the following provisions would be appropriate for C to include m its ethical code in relation to its suppliers?Select ALL that apply

• C shall insist on an exclusivity agreement with each supplier so that identical products are not available from other outlets
• C shall endeavour to adhere to the terms of its contracts with its suppliers at all times
• Cshall continuously remind suppliers that it always has several alternative suppliers to choose from.
• C shall not use its buying power unscrupulously.
• C shall keep confidential all information received from suppliers and potential suppliers
• C shall endeavour to take as high a percentage of each supplier's output as possible

CVB is a consulting firm that occupies a large office with many individual staff offices Staff access the corporate network through a wired network AM work files and company emails are accessed through this networkCVB is upgrading its office heating system At present, each room in the building has a simple, mechanical thermostat that can be used to regulate the heating CVB plans to install smart thermostats in each room These will make it possible to reduce heating costs by monitoring room temperatures centrally, using software that will be installed on the corporate network It would be expensive to connect the thermostats to CVB's existing wired network but it would be possible to connect a wireless router to the network so that CVB could install wireless smart thermostats instead The software on the network's server could then monitor and control the thermostats via the Wi-Fi connection that would be created by the wireless router.Which TWO of the following statements are correct?

• Security concerns should not prevent CVB from upgrading its heating system
• The wireless thermostats will be designed to be secure
• Cyber criminals could not identify and exploit vulnerabilities in the heating system
• The wireless thermostats could enable a breach of CVB's data
• Wired network connections are outdated and should not be used

Which of the following statements best explains why a corporate treasury department should be established as a cost centre rather than a profit centre?

• The Treasury Department should not be encouraged to speculate.
• The Treasurer should not have a great deal of responsibility.
• There is no way for the Treasury Department to generate revenue.
• The Treasurer has the ability to manipulate the Department's reported profit.

The managers of a company are agents for the shareholderstasked with increasing shareholders' wealth. Which of the following will usually increase shareholders' wealth?

• Investing in projects with the shortest payback period.
• Investing in projects with positive net present value.
• Investing in projects with the greatest level of risk.
• Not paying a dividend for several years in order to invest innew projects.

ZZ is a data security company that is responsible for cyber security m a large shopping mall 21 uses Network Configuration Management (NCM) to assist it in meeting the various needs of the mall's user community.Which THREE of the following are advantages provided by NCM?

• NCM allows ZZ to prevent data corruption for different user groups in the mall
• NCM allows ZZ to provide different service levels for different user groups in the mall
• NCM allows ZZ to segregate traffic for different user groups in the mall
• NCM allows ZZ to prevent scanners being used on the public WiFi for different user groups in the mall
• NCM allows ZZ to restrict traffic for different user groups in the mall
• NCM allows ZZ to stop malware from being spread for different user groups in the mall

Which method of quantifying risk exposure can be used to calculate the maximum loss on a portfolio occurring within a period of time with a given probability?

• Value at Risk
• Regression analysis
• Simulation
• Expected value

Which of the following is an ethical dilemma?

• A company is considering giving poorly-paid staff a generous pay rise.
• A company is deciding whether to issue debt or equity.
• A company is deciding whether to make a substantial bonus payment to its directors by means of cash or shares.
• A company must decide whether to settle a claim from an employee who appears to have fabricated a workplace injury. The company want to avoid the cost of defending the claim.

Why is it potentially useful for an organisation to maintain a risk register?

• To ensure that recognised risks are adequately managed.
• To ensure that there are no undiscovered risks.
• To eliminate all recognised risks.
• To provide the risk manager with a role.

B is a horticultural retailer with limited funds available to acquire new retail property.B'sFinanceManager hasanalysed two potential property investments. Investing inpropertyPshows an IRR of 21% while the IRRon property Q is 17%.TheFinanceManagerhas also advised that the NPV for property P is $750K, while the NPV of property Q is $850K.TheBoard needs to choose between the two properties asithasinsufficient funds for both.Based purely on theFinanceManager's analysis, which of the following is true?

• Premises P is clearly better than property Q in all respects.
• PremisesQ is clearly better than property P in all respects.
• Board members who wish to maximise return on capital employed will want property P while those who wish to maximise shareholder wealth will want property Q.
• Board members who wish to maximise return on capital employed will want propertyQ while those who wish to maximise shareholder wealth will want property P.