Chapter 11 - Financial risk

Part D. Managing risks associated with cash flows - 20%

Have a go at the few chapter questions to test your undestanding of Chapter 11.

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Part D Ch11 Financial risk - 33 questions

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Complete P3 Practice Kit with 500 Q&A

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Component

      Indicative syllabus content
D1: Evaluate financial risks facing an organisation. (a) Evaluate financial risks facing an organisation.
  • Sources of financial risk associated with international operations.
  • Transaction, translation, economic and political risk.
  • Quantification of risk exposures, their sensitivities to change in external conditions and their expected values.
  • Exposure to interest rate risks.

D2: Evaluate alternative risk management tools.

(b) Evaluate appropriate methods for the identification and management of financial risks associated with international operations.

  • Minimising political risk.
  • Responses to economic transaction and translation risks.
  • Operation and features of the more common instruments for managing interest rate risk: swaps, forward rate agreements, futures and options.
  • Techniques for combining options in order to achieve a specific risk profile: caps, collars and floors.
  • Internal hedging techniques.

For your conveniece, we've downloaded the articles posted on CIMA Connect, that are related to this chapter: