Online Access Free CIMA.P3.v2021-09-08.q126 Practice Test (Page 5)

P3 Exam Question 16

In-depth analysis showing the identification and quantification of exposure to financial risk has become more accessible in recent years. Several varieties of analysis are now available.
Which of the following statements are true?

A.Simulation, which is becoming available through standard computing packages, is complex to implement but dynamic and adaptable to cater for different assumptions.

B.Value at risk analysis, which has become available through increased computing power, is now easier to implement and can cater for extreme market conditions.

C.Monte Carlo analysis is a modelling technique which can be applied to financial analysis, allowing thousands of variables to be integrated together to show standard behaviours and outlier abnormalities requiring detailed understanding in a 'what if?' environment.

D.Regression analysis is easy to understand and implement, and based on future expectations.

E.Sensitivity analysis involves checking the performance of a financial risk model against the various interrelationships between the different input variables in the model.

P3 Exam Question 17

B, a construction company, has a policy of carrying out a post completion audit on every construction project undertaken where the value exceeds $1 million.
What is the role of the post completion audit?

A.To apportion blame for things not done well.

B.To signify the end of the project.

C.To highlight what can be done to improve similar future projects.

D.To reward staff and celebrate success.

P3 Exam Question 18

As part of risk assessment exercise for a low-cost airline you are requested to match the risks listed below with the most approriate method of minimising or dealing with each risk.