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P3 Exam Dumps - CIMA Strategic level Questions and Answers

Question # 34

A patient has been prescribed a new medicine by their physician. The medicine is accompanied by a leaflet describing potential adverse effects associated with taking it. Most of these potentially adverse effects are trivial, but the leaflet states that three patients in every 10,000 who take the medicine suffer a severe reaction requiring urgent medical attention.

Which of the following statements is true?

Options:

A.

Statistical probabilities mean very little in themselves when dealing with decisions that could have serious consequences, such as whether to take this medicine.

B.

The patient should ignore the risk because there is only a 0.03% risk of a severe adverse reaction.

C.

Statistically, the medicine is safe.

D.

The patient should not be concerned because only those few patients who are susceptible to this reaction are at risk.

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Question # 35

P Ltd, a service company, is seeking to recruit engineers to work in its maintenance division. Which TWO of the following suggestions will be most likely to help prevent fraud when recruiting the engineers?

Options:

A.

Checking that the engineers have previous experience in a similar business.

B.

Checking that the engineers do not belong to a union.

C.

Checking that the engineers have a professional engineering qualification.

D.

Taking up references from previous employers.

E.

Having a defined fraud policy statement that includes recruitment issues.

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Question # 36

The shares of a company have a beta factor of 1.15. Therefore, which of the following must be true?

Options:

A.

The shares have more unsystematic risk than the stock market average.

B.

The shares have more systematic risk than the stock market average.

C.

The shares have more total risk than the stock market average.

D.

The shares have less unsystematic risk than the stock market average.

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Question # 37

Which THREE of the following are principles of good corporate governance according to the UK Corporate Governance Code?

Options:

A.

Leadership

B.

Reliability

C.

Remuneration

D.

Honesty

E.

Accountability

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Question # 38

M plc is an IT company that bids for large contracts to sell computer systems and also to service existing systems. M plc's senior management has always set budgets which are hard to achieve and have made no allowances for the recession.

The economy has improved and M plc's senior managers have made the budget even more optimistic. The budgeted sales target has been increased by 40%.

In the past, sales staff have not tried to achieve the budget sales because it was generally believed that the targets were impossible to reach.

M plc has recently appointed a new Sales Director who has decided that sales staff will be dismissed if they fail to meet sales targets for three successive months. He is also looking for higher sales margins than were achieved before.

What are the likely consequences of the new Sales Director's policy?

Options:

A.

Sales staff will be happier in their jobs.

B.

Sales staff will tender for riskier contracts.

C.

Sales staff will encroach on other sales staff territories to get more work.

D.

Sales staff will look for new jobs.

E.

Sales staff will feel more settled and secure in their jobs.

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Question # 39

DBB is a mining company. The company's business requires manners to work underground in hazardous conditions DBB takes every possible precaution to protect the safety and wellbeing of its miners, but that does not prevent the occurrence of four or five serious injuries every year. That number is small in relation to the many thousands of owners employed by DBB.

DBB's Board is preparing a risk map Most directors believe that injuries to miners should be classified as high Likelihood and high impact, which Is a category of risk that should be avoided according to the TARA framework One of the directors has suggested that the risk should be classified as low likelihood and high impact because that would move the risk into the quadrant associated with transference or sharing and so could be draft with by, say, insurance

Which TWO of the following are correct?

Options:

A.

it is unlikely that DBB will be able to transfer the risk of these injuries by insurance.

B.

The fact that there are very few accidents supports the argument that the likelihood

C.

The director's recommendation that the risk should be reclassified will make the risk map more useful

D.

Risk maps enable companies to identify the correct migration for any given risk

E.

Discussing likelihood and impact will help DBB's Board to mitigate the risk of industrial inquiry

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Question # 40

A publicly funded hospital has put various features in place in an attempt to improve strategic control and create an improved control environment.

Which TWO of the following features are most likely to meet this objective?

Options:

A.

An Audit Committee consisting of five independent persons with expertise in finance, human resources, and medicine.

B.

A strict policy of capping the maximum salary payable to any employee at 110% of the average earned by that category of employee in the country in which the hospital is located.

C.

The setting up of a Risk Management Committee to examine the strategic risks applicable to the entity and to formally report on a quarterly basis.

D.

Ensuring that all medical staff are aware that their first priority should be to discharge patients as quickly as possible at all times so as to minimise wasting hospital resources.

E.

Ensuring that the Head of Internal Audit examines and authorises all expense claims by hospital staff.

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Question # 41

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.

Options:

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Question # 42

Identify, from the list provided, which category of business risk most accurately describes the events detailed below.

Options:

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Question # 43

CW is a large company in the food production industry. It has grown over the years by the acquisition of several smaller rivals CW 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 the following changes would be most likely to improve the overall control system?

Options:

A.

CW has just opened a bank account in the currency in which the newly opened branch is now operating

B.

Establishing an internal audit department

C.

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

D.

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

E.

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

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Exam Code: P3
Exam Name: Risk Management
Last Update: Feb 22, 2025
Questions: 339
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