P3 by CIMA Actual Free Exam Q&As

Question 1

Which of the following risks should be given highest priority?

A. Risks which have a low impact and a low likelihood of arising B. Risks which have a high impact and which may arise occasionally C. Risks which have a high impact and have a low likelihood of arising D. Risks which have a low impact but which arise frequently

Discussion 0

Correct Answer: B Vote an answer

Question 2

L is a specialist deep sea diving company The company specialises in challenging tasks that are often rejected by other companies as being too risky Most assignments are difficult and some are very dangerous L has very experienced divers who are highly trained and are safety conscious In spite of the dangerous work, L has an excellent success rate and is highly sought after L charges very high fees for its work Despite L's precautions, the likelihood of accidents is high and the consequences are also high L has an excellent insurance which has always been very expensive but the price has just been increased by 40% Which of the following is correct?

A. L should stop accepting these risky contracts. B. L should pay the very high insurance premiums demanded by its insurance company C. L should cease trading D. L should diversify into low risk diving contract s.

Discussion 0

Correct Answer: D Vote an answer

Question 3

R is a manufacturer of biscuits. The market for biscuits is extremely competitive with many companies competing for contracts with large supermarkets. The intensity of the competition means that prices are kept low; and the buyers can demand higher levels of quality, and greater flexibility in supply arrangements.
Which of the following represent ways that the use of an Information System could help R to win and retain supermarket contracts in such a competitive market?

A. It could facilitate product ordering and selection by the use of Electronic Data Interchange. B. If R's system is integrated to that of a particular supermarket then other supplier's systems cannot also be integrated to that supermarket system. C. It could be used to facilitate more timely and accurate delivery which would minimising waste. D. If R's system is integrated with that of a particular supermarket, then this will make it more expensive for the supermarket to change to a different supplier. E. It would mean that R's products would be more prominently displayed on the supermarket shelves.

Discussion 0

Correct Answer: A,C,D Vote an answer

Question 4

MNB is a multinational IT company with headquarters in Asia and with operations in all continents.
MNB is attempting to expand its operations in Europe. This is seen as a major challenge as the European market is very well developed and highly competitive.
MNB develops and manufactures its own products. Parts and assemblies are sourced across Asia, America and Europe. These are sometimes purchased locally as a condition of a contract, but MNB aims to include as much of its own equipment as possible. Transfer prices between MNB's subsidiaries 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 with sales cycles running at 3-4 months.
What types of risk are being presented here?

A. Fraud risk B. Currency risk C. Economic risk D. Legal risk E. Political risk F. Environmental risk

Discussion 0

Correct Answer: B,C,E Vote an answer

Question 5

RFD, a listed company, is considering making an investment in a risky new venture. RFD has a substantial cash surplus that will be used to acquire the necessary resources. It is unlikely that RFD would have been able to raise finance for this investment because the company is already highly geared.
Which of the following statements about stakeholders' conflicting interests are true?

A. RFD's shareholders are exposed to the systematic risk from this project and the directors are exposed to total risk. B. Neither RFD's shareholders or lenders are likely to have the means to prevent the directors from making this investment. C. The diversification of RFD's interests will reduce the risks for all stakeholders. D. RFD's lenders are likely to suffer a greater risk than RFD's equity investors. E. RFD's existing employees are likely to enjoy a significant upside risk from this project.

Discussion 0

Correct Answer: A,B,D Vote an answer

Question 6

Which of the following is the major advantage of Cloud storage for an enterprise?

A. The enterprise has complete control over it B. in-house staff are not required to maintain the infrastructure C. Sharing storage space with others D. It provides unlimited free use for the enterprise

Discussion 0

Correct Answer: B Vote an answer

Question 7

ABC is a large supermarket chain which also has online shopping and home deliveries It has a 24/7 service which runs on a central server allowing all customers to enter new orders at any time This is a business critical service which, if not available, may lead to customers turning to alternative supermarket chains offering similar services, resulting in immediate turnover loss and possible long term customer loss.
ABC is contemplating the implementation of a hot standby facility, not only to cover for emergency disaster recovery, but also to allow for business continuity, allowing necessary maintenance and updates without service interruption.
Which of the following cybersecurity objectives is ABC concerned about in this scenario?

A. Integrity of data B. Availability C. Integrity of processing D. Confidentiality

Discussion 0

Correct Answer: B Vote an answer

Question 8

BCD has recently experienced a cyber security breach which fortunately was carried out by someone more interested in demonstrating the weakness in its defence than by someone malicious This has made BCD realise that its cyber defence is inadequate BCD has engaged a cyber security consultant who has advised BCD to set up a Computer Incident Response Team (GIRT) What THREE of the following activities would this CIRT have responsibility for?
Recruit specialist security staff to avoid an incident

A. Advise on best products against malware attacks to prevent an incident. B. Carry out or assist with any investigations of an incident C. Manage or assist with any communications throughout an incident D. Restore normal operations as soon as possible after an incident. E. Ensure all security policies are carried out to avoid an incident.

Discussion 0

Correct Answer: C,D,E Vote an answer

Question 9

Select the most appropriate level of responsibility for managing each of the following risks.

Discussion 0

Correct Answer:

Question 10

N, a large company in the food production industry, has grown over the years by the acquisition of several smaller rivals. The company has ten branches located in its home country and has just opened a foreign branch for the first time. It has recently made some changes to the structure and implementation of its control system.
Which TWO of these would be most likely to improve the overall control system?

A. Purchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment. The invoices, supporting documentation and suppliers' statements are retained at the branches. B. N has just opened a bank account in the currency in which the newly opened branch is now operating. C. A policy has been initiated to complete a physical inventory of all non-current assets at least annually.
This is then reconciled with the non-current asset register. D. Establishing an Internal Audit department. E. Excess funds are now invested, by the Finance Director, in short-term securities. The Finance Director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments.

Discussion 0

Correct Answer: C,D Vote an answer

CIMA Risk Management - P3 Exam Practice Test