Pass P3 Brain Dump Updated Certification Sample Questions [Q80-Q98]

QUESTION 80
Will owns $400,000 of shares in Company X.
Company X has a daily volatility of 1% of its share price.
Calculate the 28 day value at risk that shows the most Will can expect to lose during a 28 day period.
(Will wishes to be 90% certain that the actual loss in any month will be less than your predicted figure).
Give your answer to the nearest $000.

QUESTION 81
E purchases parts for one of the machines it manufactures from Country X Place the risk classification next to the risk it relates to:

QUESTION 82
Return on capital employed (ROCE) can be a useful measure of divisional performance. For which of the following types of company is ROCE likely to be most appropriate?

QUESTION 83
The list below has duties performed by risk managers and internal auditors. Show who would carry out the duties assuming the company has both risk managers and internal auditors.

QUESTION 84
H Ltd is a logistics company which is likely to be seeking a Stock Exchange listing shortly. The directors wish to strengthen the company’s internal controls.
Which of the following statements are valid?

QUESTION 85
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?

QUESTION 86
Which TWO of the following are NOT methods used for risk identification?

QUESTION 87
The internal audit department should always give a report at the end of its audit. This report is intended to be useful and help the company going forward. The report should always include any recommendations for improvements. Which of the following statements are true and which are false?

QUESTION 88
FGT is evaluating the political risks associated with its operations around the world.
Which of the following would indicate that a particular subsidiary has a high level of political risk?

QUESTION 89
H sells machinery and also associated services, such as advice and repairs. H’s industry is going through considerable transformation.
Classify each of the examples of information available to H’s management as strategic, operational or of having little value.

QUESTION 90
UIO designs clothes and pays third parties to manufacture them A recent television programme showed that two of the factories used by UIO were employing illegal immigrants whose status was used by the factory’s owners to force them to work for low wages and in unpleasant and dangerous conditions. These factories were located in a developed country with strong labour laws Classify each of the following statements as true or false:

QUESTION 91
R plc is considering an investment of $1,100,000 in a new machine which is expected to have substantial cash inflows over the next five years.
The annual cash flows from this investment and their probability are shown below:
Annual cash flow ($) Probability
200,000 0.4
280,000 0.5
350,000 0.1
At the end of its five-year life, the asset is expected to sell for $100,000. The cost of capital is 5%.
What is the Expected Net Present Value?
Give your answer to the nearest whole $.

QUESTION 92
SDF is a quoted company that has a large internal audit department.
Which of the following would impair the independence of SDF’s internal audit?

QUESTION 93
A large department store has just discovered that the staff in the store coffee shop have been defrauding the company for the past three years. The six employees who work in the coffee shop have been keeping a proportion of the cash takings, concealing the theft by not recording all sales up in the till They shared the proceeds of this fraud between them The fraud was only uncovered when one of the employees left and his replacement reported the theft to management rather than becoming involved in the crime Which of the following best describes the role of the store’s internal controls in the context of this fraud?

QUESTION 94
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.

QUESTION 95
Select the most appropriate level of responsibility for managing each of the following risks.

QUESTION 96
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?

QUESTION 97
E purchases parts for one of the machines it manufactures from Country X Place the risk classification next to the risk it relates to:

QUESTION 98
UIO designs clothes and pays third parties to manufacture them A recent television programme showed that two of the factories used by UIO were employing illegal immigrants whose status was used by the factory’s owners to force them to work for low wages and in unpleasant and dangerous conditions. These factories were located in a developed country with strong labour laws Classify each of the following statements as true or false: