CIMA Exam CIMAPRA19-F03-1 Topic 6 Question 95 Discussion

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

Question #: 95
Topic #: 6

[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 Wynell at Sep 08, 2024, 12:09 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Leonie

2 months ago

I think B is also true. Money market hedges still leave the company exposed to currency risks, just in a different way. Gotta be careful with those!

upvoted 0 times

...

Denny

2 months ago

Haha, 'easy to set up'? Yeah, right! If only. I'd go with A, C, and D on this one.

upvoted 0 times

Carlton

1 months ago

User 3: Yeah, they are more complex than forward contracts.

upvoted 0 times

...

Dudley

1 months ago

User 2: I think A, C, and D are true statements about a money market hedge.

upvoted 0 times

...

Irene

1 months ago

I agree, setting up a money market hedge is not easy.

upvoted 0 times

...

Dylan

2 months ago

I agree with Asha. A, C, and D are definitely true. Money market hedges are a bit of a hassle to set up though, so I'm not sure I'd call them 'easy'.

upvoted 0 times

...

Asha

2 months ago

A, C, and D seem like the correct options to me. Money market hedges are more flexible but also more complex than forward contracts.

upvoted 0 times

Ernestine

1 months ago

Yes, that's right. Money market hedges can be a good option for managing currency risks, but they do come with some complexity.

upvoted 0 times

...

Anthony

1 months ago

I agree, money market hedges offer a similar outcome to forward contracts but are a bit more flexible and complex.

upvoted 0 times

...

Theola

2 months ago

I think A, C, and D are correct. Money market hedges are indeed more flexible but also more complex than forward contracts.

upvoted 0 times

...

Bernadine

2 months ago

I disagree with statement B. Money market hedges actually help reduce currency risks.

upvoted 0 times

...

Fernanda

3 months ago

I agree with Chuck. Statement C is also true as money market hedges can be more flexible.

upvoted 0 times

...

Chuck

3 months ago

I think statement A is true because money market hedges are similar to forward contracts.

upvoted 0 times

...