Question 1

Leo LLP is a company which sources materials internationally, and then sells these on nationally at a small margin. Leo LLP has noted that there is a risk of exchange rate fluctuations making their purchases unviable. The CFO has declared that the only way to mitigate this risk is via hedging and that they should look at price fixing. is this correct?

Options :

A : yes- hedging is the only solution to mitigate the risk of adverse price movements

B : yes- this reduces the risk to 0

C : no- Leo LLP could do nothing and increase its prices instead

D : no- Leo LLP can take out insurance to mitigate this risk

Answer: C

Question 2

Robot Ltd manufactures high end robots. A lot of value is tied up in the stock that it holds within its warehouse as each robot is worth several thousand pounds. The company has decided to enlist the services of a third party provider for disaster recovery, to help them shape a plan for if something were to happen to the stock, such as a flood. Is this the correct thing for Robot Ltd to do?

Options :

A : yes- a 3rd party can provide broader experience and expertise

B : yes- a third party is a cheap option for disaster recovery planning

C : no- Robot Ltd should create a cross-functional team to draw up the plan as internal stakeholders will understand the risks better than a 3rd party

D : no - a 3rd party can only help in the solution stage of disaster recovery, not the planning stage

Answer: A

Question 3

Which of the following risks would likely be tolerated by a company?

Options :

A : no risks should be tolerated

B : opportunities which are low risk and low impact

C : opportunities which are low risk and high impact

D : opportunities which are high risk and low impact

Answer: B

Question 4

An indemnity clause should contain which of the following pieces of information 1) duties of both parties 2) a monetary limit 3) insurance levels 4) details of the breach 5) a time limit

Options :

A : 1,2,5

B : 1,3,4

C : 2,4,5

D : 3,4,5

Answer: A

Question 5

2021-07-23-19-21-32-e2efebc73ed7d3407c3ab0a1142d7f4e

Which of the following will you put into box 7?

Options :

A : service credits

B : NDA

C : Conformance Specification

D : Force Majeure

Answer: C

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