CIMA Exam CIMAPRA19-F03-1 Topic 5 Question 65 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 65
Topic #: 5

Companies L. M N and O:

* are based in a country that uses the RS as its currency

* have an objective to grow operating profit year on year

* have the same total levels of revenue and cost

* trade with companies or individuals in the United States. All import and export trade with companies or individuals in the United States is priced in US$.

Typical import/export trade for each company in a year are as follows:

Which company's growth objective is most sensitive to a movement in the USS / RS exchange rate?

ACompany L

BCompany M

CCompany N

DCompany O

Show Suggested Answer

Suggested Answer: A, B, E

by Leota at Feb 27, 2023, 01:05 AM

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Katlyn

2 months ago

The answer is clearly D. Company O has the most trade in USD, so their profits will be the most affected by changes in the exchange rate.

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Carin

1 days ago

D) Company O

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Golda

7 days ago

C) Company N

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Man

8 days ago

B) Company M

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Gail

11 days ago

A) Company L

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Roslyn

2 months ago

C'mon, it's pretty obvious that Company O is the one to watch here. Their numbers show they're the most exposed to the USD/RS exchange rate.

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Myra

11 days ago

Definitely, Company O needs to closely monitor the USD/RS exchange rate for their growth objective.

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Rodrigo

25 days ago

Yeah, their import and export numbers with the US are the highest among the companies.

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Helaine

1 months ago

I agree, Company O seems to be the most sensitive to the exchange rate.

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Erinn

2 months ago

Haha, I bet Company O's accountant is sweating bullets every time the exchange rate fluctuates. Gotta love those global trade challenges!

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Willetta

1 days ago

It's a tough spot to be in, but it's all part of the game when you're involved in global trade.

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Karan

2 days ago

I think Company O needs to come up with a solid currency risk management strategy.

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Adolph

3 days ago

Yeah, Company O must have a tough time managing their profits with the fluctuating exchange rates.

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Janine

4 days ago

Company O's growth objective is definitely the most sensitive to exchange rate movements.

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Emiko

7 days ago

It's a tough spot to be in, but I guess it comes with the territory of international trade.

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Kristin

17 days ago

I wonder how they hedge against those risks, it must be a constant challenge for them.

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Asuncion

27 days ago

Yeah, Company O must have a tough time managing their profits with all that currency fluctuation.

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Francene

1 months ago

I agree, global trade definitely adds an extra layer of complexity to their growth objectives.

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Tarra

1 months ago

Company O's accountant must be on edge with those exchange rate fluctuations!

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Vicente

2 months ago

Company O's growth objective is definitely the most sensitive to exchange rate movements.

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Lenita

2 months ago

But Company O also has a significant amount of trade with the United States. It could also be sensitive to the exchange rate.

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Leana

2 months ago

I agree with you, Kara. Company M has the highest proportion of import and export trade with the United States.

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Timmy

2 months ago

Company O's growth objective is the most sensitive to the USD/RS exchange rate movement. They have the highest proportion of exports and imports in USD compared to the other companies.

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