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CIPS Exam L4M4 Topic 2 Question 27 Discussion

Actual exam question for CIPS's L4M4 exam
Question #: 27
Topic #: 2
[All L4M4 Questions]

Philip is a procurement manager at XYZ Company which imports raw materials from abroad. Sup-pliers provide quotes to Philip in their local currency. Is this the best way to reduce the risk to XYZ Company of currency fluctuations?

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Suggested Answer: C

The correct answer is 'no- quoting in the supplier's currency increases the risk for the buyer'. This questions comes up in a variety of formats in the exam. Remember; if the price is in your own currency (most examples in the exam are given in ) there is less risk than if the prices are quoted in a foreign currency. This is because exchange rates fluctuate; if the price is in you always know what you're paying, if it's in another currency the price can change daily depending on if the exchange rate compared to has gone up or down.


by Zona at Dec 11, 2024, 06:49 AM

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Jamika
2 months ago
D) no- quoting in the supplier's currency does not affect the risk to the buying organisation. Wait, are we taking a test or playing a game of 'Guess the Opposite'?
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Glenna
2 months ago
A) yes- this means the price won't go up or down. Hmm, I think someone's been living under a rock.
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Amie
2 months ago
B) yes- this puts the risk on the supplier. Nice try, but I'm not falling for that one.
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Walton
1 months ago
User 3: B) yes- this puts the risk on the supplier. Nice try, but I'm not falling for that one.
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Mauricio
1 months ago
User 2: B) yes- this puts the risk on the supplier
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Leonor
1 months ago
User 1: A) yes- this means the price won't go up or down
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Theola
2 months ago
C) no- quoting in the supplier's currency increases the risk for the buyer. Duh, it's basic economics!
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Barney
26 days ago
D) no- quoting in the supplier's currency does not affect the risk to the buying organisation
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Margarita
1 months ago
C) no- quoting in the supplier's currency increases the risk for the buyer
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Valentine
2 months ago
B) yes- this puts the risk on the supplier
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Lindsay
2 months ago
A) yes- this means the price won't go up or down
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Lenna
2 months ago
That's true, but it also means the buyer has to bear the risk of currency fluctuations.
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Shay
2 months ago
But doesn't quoting in the supplier's currency mean the price won't go up or down?
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Jaime
3 months ago
I agree with Elsa, it's better to have the risk on the supplier.
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Elsa
3 months ago
I think quoting in the supplier's currency increases the risk for the buyer.
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