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CIMA Strategic Level Case Study Exam Dumps P3 Exam for Full Questions - Exam Study Guide
NEW QUESTION 94
WTW is a global company which produces high-tech equipment such as smart televisions and mobile phones The CFO has just resigned, having been offered a post at a competitor The CFO was well regarded and WTWs share price has fallen in response to the announcement At a board meeting the production director commented that the share price fall is the fault of the nomination committee Which THREE of the following statements are correct?
- A. The nomination committee should prepare a description of the role and capabilities required for the CFO's replacement
- B. When planning the CFO's replacement the nominations committee should consider the diversity of the board
- C. The nomination committee should have considered succession planning for directors before the CFO resigned
- D. Most of the members of the nomination committee should be executive directors as they are responsible for ensuring the share price recovers quickly.
- E. If the nomination committee had been working effectively the CFO would not have resigned
Answer: A,B,C
NEW QUESTION 95
Zia is an accountant and wishes to take out a Forward Rate Agreement (FRA) as a hedging instrument. The company treasurer has advised that a short-term interest rate (STIR) future would be better.
Which of the following is true of an STIR?
- A. A STIR must be kept for the whole duration of the contract.
- B. A STIR is flexible and the position can be closed quickly and easily.
- C. A STIR can be tailored to the exact needs of the company.
- D. If interest rates have gone down the price of the future will have fallen.
Answer: B
NEW QUESTION 96
B uses a balanced scorecard to monitor the performance of its divisions.
Classify each of the following decisions taken by a division's management team as either commercially sound or dysfunctional.
Answer:
Explanation:
NEW QUESTION 97
COM is a well established company in the construction industry The company was founded by the Mac family
30 years ago and several family members still serve on the Board The company obtained a listing five years ago The Board has an appropriate balance between executive and non-executive members It also has audit remuneration and nomination committees The average age of board members is 68 COM is profitable but profit margins have been falling steadily and this year's revenues are lower than it was achieved last year The Board recognis thai it does not have a long term strategy in place and has been losing business to newer, more aggressive competitors Which THREE of the following statements are correct?
- A. The nomination committee should be operating for the benefit of the directors.
- B. The non-executive directors should have challenged the lack of long term strategic planning
- C. The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy
- D. The nomination committee should have had a succession plan in place for directors.
- E. The audit committee should have alerted the Board to the impact of falling profit margins
Answer: B,C,D
NEW QUESTION 98
HWG is a large company which grows and processes coffee The coffee is sold to supermarkets, branded with their names for sale as "own brand" products HWG brands and packages the coffee using the supermarkets' own designs HWG's directors are considering a strategic proposal to develop a range of coffees to be sold under a brand that HWG will develop Which TWO of the following should the directors consider as part of their strategic analysis?
- A. The design of packaging for the new brand
- B. Recruiting a marketing firm to advertise the new coffee
- C. The reaction of the supermarkets who currently buy coffee from HWG
- D. The sales volume forecast for the new coffee
- E. The choice of name for the new brand
Answer: C,D
NEW QUESTION 99
The long-term prospects for inflation in the UK and the USA are 2% and 6% per annum respectively.
The GBP/USD spot rate is currently GBP/USD1.71.
Using purchasing power parity theory, what GBP/USD spot rate would you expect to see in three months' time?
- A. GBP/USD1.77
- B. GBP/USD1.65
- C. GBP/USD1.69
- D. GBP/USD1.73
Answer: D
NEW QUESTION 100
MNO is a hotel chain which consists of many small local hotels spread throughout Sealand and often used by business customers It has decided to undertake scenario planning to see how it might be affected by changes in the future.
Which TWO of the following scenarios would be helpful in strategic scenario planning for MNO?
- A. The growth in internet services that facilitate short-term room lets by private landlords.
- B. Climate change
- C. The increase in the use of search apps to book hotel rooms
- D. An increase in interest rates
- E. A change in local business rates for private property.
Answer: A,C
NEW QUESTION 101
M is a multinational IT company with headquarters in Asia and with operations in all continents.
It is now trying to expand its operations in Europe. This is seen as a major challenge as the European market is very well developed with established players in fierce competition against each other.
As well as developing and producing its own products, it sources products across Asia, America and Europe as part of infrastructure deals which have to include as much of its own equipment as possible. In doing this, transfer prices can be set in YEN, USD, EURO, GBP. Transfer prices are revised every month in line with production times as most goods are made on short order times with sales cycles running at 3-4 months.
The longer sales cycle against committed transfer pricing presents problems as customers expect quotes to be valid for 90 days whereas M's suppliers reserve the right to revise pricing at the end of every month with quotes only valid for 8 days in the following month.
How should M deal with this problem?
- A. Incentivise sales persons to be more accurate when forecasting prices.
- B. Use a centralised treasury function to set up unilateral netting so that all trades can be balanced off against each other before any money is transferred.
- C. Do nothing, everyone is in the same situation.
- D. Offer a small discount for any customers who pay in M's home currency.
Answer: B
NEW QUESTION 102
G plc has decided to move its production plant to overseas Country A.
This would make the product cheaper to produce. The technology used to make the product is very advanced and some of the staff would have to move to Country A.
The Production Director has identified that there are some political risks in moving to Country A.
Match the methods of reducing the political risks associated with the move to Country A with the corresponding risks.
Answer:
Explanation:
NEW QUESTION 103
Move the category of risk to the box beside the risk description it best matches.
Answer:
Explanation:
NEW QUESTION 104
JHU is a retail chain that has 20 shops JHU's Internal Audit Department has just completed an investigation into the operation of controls over credit card payments by shop customers In 12 cases, the shops were complying with JHU's standard procedures The other 8 shops had serious deficiencies that differed between shops.
The Internal Audit Department has drafted a detailed report on the outcome of the audit visit carried out at each shop, but has not yet submitted them to senior management.
Which TWO of the following statements are correct?
- A. All 20 reports should be placed on JHU's intranet so that every shop manager can learn from good and bad practices noted at each shop
- B. The Internal Audit Department should consider editing the concerns arising from the investigation in order to avoid demotivating the shop managers
- C. It would be a mistake to submit the reports relating to the 12 shops that were in full compliance to senior management
- D. Draft reports should be discussed with their respective shop managers, who should have the opportunity to comment before the reports are submitted to senior management
- E. The reports relating to the deficient shops should set a deadline for their systems to be rectified and a follow-up audit visit carried out
Answer: C,D
NEW QUESTION 105
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 106
BCD has set up a number of functions within its security operations centre (SOC) One of these is a Hunt team.
Which of the following is the primary function of a Hunt team?
- A. To look for weaknesses in other peoples' systems
- B. To look for solutions in response to threats.
- C. To look for signs that BCD's system has been breached
- D. To look for weaknesses in BCD's cyber security system.
Answer: C
NEW QUESTION 107
Multinational companies have a variety of methods by which to manage currency risk.
Select ALL internal hedging methods from the following list.
- A. Forward contracts
- B. Leading and lagging
- C. Matching
- D. Money market hedge
- E. Pooling
- F. Invoice in home currency
Answer: B,C,E,F
NEW QUESTION 108
Match the descriptions shown in the boxes below with the method of quantifying risk exposure it best describes.
Answer:
Explanation:
NEW QUESTION 109
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