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CIMA Updated P3 Exam Questions and Answers by honey

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CIMA P3 Exam Overview :

Exam Name: Risk Management
Exam Code: P3 Dumps
Vendor: CIMA Certification: CIMA Strategic
Questions: 339 Q&A's Shared By: honey
Question 24

H has a floating rate loan that it wishes to replace with a fixed rate. The cost of the existing loan is LIBOR + 4%.  H would have to pay a fixed rate of 8% on a fixed rate loan. H's bank has found a potential counterparty for a swap arrangement.

The counterparty wishes to raise a variable rate loan. It would pay LIBOR + 1% on a variable rate loan and 9% on a fixed rate.

The bank will require 10% of the savings from the swap and H and the counterparty will share the remaining saving equally.

Calculate H's effective rate of interest from this swap arrangement.

Options:

A.

H would pay 6.2%

B.

H would pay 6%

C.

H would pay Libor + 1%

D.

H would pay 6.4%

Discussion
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Question 25

Which categories on a risk map best describe the loss of sales floor staff in a fast fashion chain?

Options:

A.

Low likelihood; low consequence

B.

High likelihood; high consequence

C.

Low likelihood; high consequence

D.

High likelihood, low consequence

Discussion
Question 26

Company W produces mobile phone components and has recently tendered for a substantial contract. The results of the tendering process will not become available until three months from now. If the company is successful it will require 2,000 units of a commodity which is currently traded in an open commodity market for $740 per unit. However, there has been speculation that this commodity could increase substantially in price over the next three months and so the company is considering purchasing the commodity now and storing it for three months.

The funds to buy the commodity would be borrowed at an annual interest rate of 7% and the storage cost of the product would be $5.40 per unit per month. The storage costs would be paid at the end of the three month storage period.

Which of the following represents the gain or loss (to the nearest thousand dollars) that will accrue to Company W assuming that the price of the commodity rises to $800 in three months' time?

Options:

A.

$62,000 gain

B.

$95,000 gain

C.

$88,000 gain

D.

$16,000 loss

Discussion
Question 27

SDF has a variable rate loan of $100 million on which it is paying interest of LIBOR + 2%.

SDF entered into a swap with CV bank to convert this to a fixed rate 7% loan. CV bank charges an annual commission of 0.3% for making this arrangement.

Calculate the net payment from SDF to CV bank at the end of the first year if LIBOR was 3% throughout the year.

Give your answer in $ million, to one decimal place.

Options:

Discussion
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