CIMA Exam CIMAPRA19-F03-1 Topic 5 Question 74 Discussion

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

Question #: 74
Topic #: 5

Company A is based in country A with the AS as its functional currency. It expects to receive BS20 million from Company B in settlement of an export invoice.

The current exchange rate is A$1 =B$2 and the daily standard deviation of this exchange rate = 0 5%

What is the one-day 95% VaR in AS?

AA$50,000

BA$164,500

CA$82,250

DA$822,500

Show Suggested Answer

Suggested Answer: A, B, E

by Fernanda at Oct 09, 2023, 02:41 AM

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Leontine

1 months ago

Ugh, VaR calculations always give me a headache. I wish they'd just ask about something more straightforward, like foreign currency translation.

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Bong

19 days ago

C) A$82,250

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Lynelle

21 days ago

B) A$164,500

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Cheryll

1 months ago

A) A$50,000

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Justine

2 months ago

Alright, let's think this through step-by-step. I've got this!

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Albina

10 days ago

Jules: C) A$82,250

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Cyndy

12 days ago

Keneth: B) A$164,500

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Jules

18 days ago

Jovita: A) A$50,000

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Keneth

1 months ago

User 3: What is the one-day 95% VaR in AS?

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Jovita

1 months ago

User 2: The current exchange rate is A$1 = B$2.

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Rosendo

1 months ago

User 1: So, Company A is based in country A with AS as its functional currency.

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Joseph

2 months ago

Hmm, the daily standard deviation of the exchange rate is given as 0.5%. I wonder if that's a typo or if it's meant to be a trick.

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Mireya

2 months ago

This seems like a tricky question. I'd better review my notes on value at risk (VaR) calculations.

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Lorenza

2 months ago

I'm not sure, but I think the correct answer is C) A$82,250.

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An

2 months ago

I agree with Benton, the one-day 95% VaR in AS should be A$164,500.

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Benton

3 months ago

I think the answer is B) A$164,500.

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