CIMA Exam CIMAPRA19-P03-1 Topic 1 Question 39 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 39
Topic #: 1

In-depth analysis showing theidentification and quantification of exposure to financial risk has become more accessible in recent years. Several varieties of analysis are now available.

Whichof the followingstatementsare true?

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

BMonte 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.

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

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

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

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Suggested Answer: C, E

by Cammy at Feb 09, 2024, 12:24 AM

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