CIMA Exam CIMAPRA19-F03-1 Topic 5 Question 103 Discussion

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

Question #: 103
Topic #: 5

[All CIMAPRA19-F03-1 Questions]

Which THREE of the following statements are true of a money market hedge?

AThey offer roughly the same outcome as a forward contract.

BThey leave the company exposed to currency risks.

CThey may be a little more flexible in comparison to a forward contract.

DThey are more complex than forward contracts.

EThey are easy to set up.

Show Suggested Answer

Suggested Answer: A, B, D

by Reed at Dec 10, 2024, 01:11 AM

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Danilo

3 months ago

A and C are spot on, but I'm not convinced about D. I've heard money market hedges can be pretty straightforward, even if they're not as simple as a forward contract.

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Corrie

3 months ago

Haha, money market hedges are about as complex as untangling a ball of Christmas lights! But C is definitely true, they offer more flexibility than those boring old forward contracts.

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Shonda

2 months ago

E) They are easy to set up.

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Tayna

2 months ago

C) They may be a little more flexible in comparison to a forward contract.

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Lelia

3 months ago

A) They offer roughly the same outcome as a forward contract.

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Barbra

3 months ago

I'm not sure about E - I thought money market hedges were actually quite difficult to set up. B is definitely true though, leaving the company exposed to currency risks.

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