Free CIMA P3 Exam 2023 Practice Materials Collection
P3 Exam Info and Free Practice Test All-in-One Exam Guide Jun-2023
The CIMA P3 exam is ideal for professionals who are looking to advance their career in risk management. This exam is particularly useful for individuals who work in the finance, accounting, and management sectors, as it provides them with a solid understanding of risk management principles and techniques. The exam is also suitable for individuals who are looking to switch to a career in risk management or enhance their skills in this area.
To prepare for the CIMA P3: Risk Management exam, candidates are advised to study the syllabus thoroughly and to practice applying the concepts and techniques in real-life scenarios. They can also benefit from attending training courses and workshops that are designed specifically for this exam. Additionally, there are a range of study materials available, such as textbooks, revision guides, and practice exam papers, which can help candidates to prepare effectively for the exam.
The certification exam is structured in two parts. The first part consists of multiple-choice questions that test a candidate's knowledge of risk management concepts, while the second part is a case study that assesses a candidate's ability to apply the concepts learned in real-life scenarios. The exam is computer-based and is available globally through authorized testing centers.
NEW QUESTION # 77
In relation to the use of the adjusted present value (APV) technique, which of the following statements are correct?
- A. The interest tax shield on the project's debt must be known, or at least estimated.
- B. To apply APV, the proportions of debt and equity in the capital structure must be known.
- C. The weighted average cost of capital - net present value technique and the APV technique will, if applied correctly, give the same answer.
- D. To apply APV the actual amounts of debt and equity in the capital structure must be known.
Answer: A,C
NEW QUESTION # 78
Q is a company which generates electricity from alternative energy sources. It has just begun constructing a wind farm near a well-known beauty spot. The project has been controversial as campaigners say it will be noisy and unsightly.
The campaigners took legal action but lost the case. Some of them have started a campaign of direct action against Q and are physically blocking roads leading to the site and attempting to intimidate Q's staff.
Q has hired a security company to help it to protect its staff.
In relation to the ethics of this scenario, which of the following statements are valid?
- A. Q no longer has any duty of care to the protestors since their actions are illegal because they lost their court case.
- B. Q is within its rights to hire the security firm because it has duty of care to its employees.
- C. The generation of electricity from clean, renewable and sustainable sources is too important for the protestors' concerns to be considered.
- D. Since the protestors have already lost their court case they would no longer be ethically justified in engaging in political lobbying to try to get the government to change the law in this area.
- E. The security firm must take care not to use more force against the protestors than is absolutely necessary.
Answer: B,E
NEW QUESTION # 79
An oil company has entered into a joint venture with a competing oil company to develop a new oil field. The joint venture arrangement is intended to mitigate the risks associated with developing the oil field.
The following disclosure appears in the oil company's risk report:
"Many of our large projects and operations are conducted through joint ventures. These arrangements involve complex risk allocation and indemnification arrangements and we have less control over these activities than we would have if we had full ownership and control. Our partners may have economic or business interests that are opposed to ours, and may exercise the right to block key decisions or actions. We believe the joint arrangement is in our best interest." Which of the following statements are correct?
- A. The risk report says nothing useful about the risk.
- B. If the risk report had not reported the risk the shareholders might not have been aware of the risk.
- C. The risk report means that the shareholders know exactly how bad the risk is.
- D. Now the shareholders know the directors are aware of the risk.
- E. The shareholders now have more useful information.
Answer: B,D,E
NEW QUESTION # 80
K is a large mining company. In its risk report it states that there is a risk of accidents and injury because of the nature of the industry. It states that it has staff training in place and complies with all Health and Safety regulations but in spite of this there will still be a residual risk that accidents and injuries may occur.
Which of the following statements are correct?
- A. Most companies in this industry will say something similar in their risk report.
- B. The directors are avoiding their responsibilities by saying there is a residual risk.
- C. Accepting a residual risk does not imply the company is reckless.
- D. Some risks cannot be eliminated.
- E. The shareholders should not invest because there is still a residual risk.
Answer: A,C,D
NEW QUESTION # 81
Assuming a company has both internal auditors and risk managers, indicate which of these would perform the duties listed below:
Answer:
Explanation:
NEW QUESTION # 82
ERT is choosing between two maintenance policies for its vehicles. The outcomes of these policies are difficult to predict and so ERT has run a simu-lation of both.
Policy 1 has an expected annual cost of $400,000 per year, with a standard deviation of $80,000.
Policy 2 has an expected value of $350,000, with a standard deviation of $150,000.
Which of the following statements are correct?
- A. Policy 1 will always be the more expensive in any given period.
- B. Policy 2 is clearly the better policy.
- C. Policy 2 has the greater potential upside risk.
- D. Policy 2 is the more likely to cost more than $500,000 in any given year.
- E. Policy 2 is the more risky.
Answer: C,D,E
NEW QUESTION # 83
V buys vegetables and fruit from three farms located in a different part of V's country and sells them to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal immigrants whose status was used by the factory's owners to force them to work for low wages and in unpleasant conditions. They are forced to live in small overcrowded caravans with no running water. They are also given meals which are cold and poor quality. These farms are located in a developed country with strong labour laws.
Classify each of the following statements as true or false.
Answer:
Explanation:
NEW QUESTION # 84
The technology used by 3D printers is developing rapidly These machines can now use a data file to print a solid object Depending on the printer the object can be plastic, metal or ceramic The increasing capability of those printers is being matched by the falling prices of the printers themselves and of the materials that they use to create the finished product Which THREE of the following suggest that 3D printing is a potentially disruptive technology?
- A. The printers use expensive materials
- B. Many of the spare parts used to repair cars are made out of plastic or metal.
- C. Some courier companies have purchased 3D printers for their depots
- D. Design engineers typically design and draw plans for new products on their computers.
- E. There is a limit to the size of objects that can be 3D printed.
- F. Parts created by 3D printers can be distorted during the print process
Answer: C,D,E
NEW QUESTION # 85
T has its computer facilities in a building adjacent to its headquarters Severe structural problems have been discovered with this building and T has been advised that the only option is demolition and rebuild This leaves T with strategic decisions to make about its IT provision and it has decided to investigate the outsourcing of its services.
Which TWO of the following factors should T consider as most important at this stage?
- A. A supplier who has facilities conveniently located close to its headquarters
- B. A supplier with a long history of providing outsourcing services
- C. A supplier who provides a wide range of services
- D. A supplier who can act as its agent in choosing the cheapest options
- E. A supplier who can act as a partner in considering all its business needs
Answer: A,B
NEW QUESTION # 86
Company X has been advised by its internal audit team that it should have a fraud response policy A is a new member in the internal audit team and he does not see why this would help to prevent fraud and has asked for an explanation Which TWO of the following would be included in this explanation? It would act as a deterrent and help prevent staff from committing fraud
- A. It would show that the company is taking the risk of fraud seriously.
- B. It would lay down processes and procedures that internal audit should follow if they suspect fraud
- C. It would clarify the role of various staff in detecting fraud
- D. It would be part of the internal control system of the company
Answer: B,D
NEW QUESTION # 87
A company has a sound system of internal controls that have been reviewed by the internal audit department.
Which TWO of the following correctly identify reasons why the company's control system might fail to prevent or detect an irregularity?
- A. The internal audit department cannot be expected to identify control weaknesses.
- B. Two fraudulent members of staff could collude.
- C. A dishonest member of staff could input an invalid transaction
- D. The accounting system could combine manual and computerised controls.
- E. A director could override a control procedure.
Answer: B,E
NEW QUESTION # 88
Amber selects appropriate suppliers and places purchase orders.
Brian passes invoices for payment and submits payment instructions to the bank.
Chris checks incoming inventory and unpacks goods from their containers.
Dirwan posts purchase invoices and files invoices and supporting documents.
Which member of staff could most easily commit fraud?
- A. Dirwan
- B. Chris
- C. Amber
- D. Brian
Answer: D
NEW QUESTION # 89
Move the category of risk to the box beside the risk description it best matches.
Answer:
Explanation:
NEW QUESTION # 90
TRF is conducting a post completion audit on an investment in a pollution control machine that has reached the end of its five year useful life.
TRF could have been heavily fined if the machine had failed to keep pace with the output of emissions, measured in units. TRF's cost of capital is 10%. When the machine was purchased, there was a choice of three machines on the market:
TRF purchased the Big machine, but annual requirements only exceeded 600,000 once, in year 3, when
720,000 units of emissions were emitted.
Calculate the amount that the post completion audit shows TRF overpaid for the ownership costs associated with this machine.
Give your answer to the nearest whole $ (in $'000s).
Answer:
Explanation:
$12582000
NEW QUESTION # 91
DFR is an online retailer that sells picture frames The software running on DFR's website enables customers to log in and make purchases by inputting an email address as a user name and a password that must contain at least eight characters, including upper and lower case letters, numbers and punctuation marks (e.g. £, $ or!) Once logged in, customers can check previous orders that they have placed.
Customers can also use DFR's website to change personal details, including credit card numbers and delivery addresses Whenever they wish to use those facilities, the software sends a text message containing a six-digit number to their mobile phones They must input that number before the system will accept changes to their personal details Which TWO of the following statements are correct?
- A. The software should never show the whole of a customer's credit card number on screen, even if the customer has logged in and input the six-digit number.
- B. The arrangement with the text message will have no effect on the security associated with changing personal details
- C. It is illogical to have different security measures in place for orders and for access to personal details.
- D. The software treats customers' personal details as being more sensitive than their ordering histories
- E. Customers should be able to update the mobile phone numbers in their DFR accounts using only their email addresses and passwords for access
Answer: A,B
NEW QUESTION # 92
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£287,639
- B. GB£554,047
- C. GB£391,640
- D. GB£(111,973)
Answer: A
NEW QUESTION # 93
You have just been employed as a management accountant in a small business with an annual turnover of $0.5 million.
You have a wide range of duties because the business is small.
Which of the following is an ethical risk?
- A. Being asked to buy very small gifts for key clients.
- B. Being asked to work weekends working out tenders for new contracts.
- C. Being asked to work weekends, playing golf with clients.
- D. Being asked to work weekends, taking clients to night clubs making sure they have as much alcoholic drink as they want so that they will sign contracts.
Answer: D
NEW QUESTION # 94
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