Free CIMA CIMAPRO19-F03-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRO19-F03-1-ENG exam questions and correct answers

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Total 305 Questions | Updated On: Aug 18, 2026

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Question 1

The Treasurer of Z intends to use interest rate options to set an interest rate cap on Z’s borrowings. Which of the following statement is correct?

A : Treasurer should buy an interested rate floor and sell an interested cap ta the same time

B : Treasurer will retain the benefit of movcTcnt3 in interest ratc3 below the floor limit.

C : cost of a collar is lower than the cost of a cap a one.

D : Treasurer will have to negotiate the options with Z's Dark

Answer: C

Question 2

A company has 6 million shares in issue. Each share has a market value of $4.00.

$9 million is to be raised using a rights issue.

Two directors disagree on the discount to be offered when the new shares are issued.

• Director A proposes a discount of 25%

• Director B proposes a discount of 30%

Which THREE of the following statements are most likely to be correct?

A : theoretical ex-rights price will be higher under Director B's proposal than under Director A's proposal.

B : re shares will be issued under Director B's proposal than under Director A's proposal.

C : rights issue price will be $3.00 under Director A's proposal.

D : terms of the rights issue will be one new share for every two existing shares under Director A's proposal

E : areholder wealth will be higher under Director A's proposal than under Director B's proposal.

Answer: B,C,D

Question 3

A company financed by equity and debt can be valued by discounting:

A : ee cash flow before interest at WACC.

B : ee cash flow before interest at the cost of equity.

C : ee cash flow after interest at WACC.

D : ee cash flow after interest at the cost of equity.

Answer: A

Question 4

A company based in Country D, whose currency is the D$, has an objective of maintaining an operating profit

margin of at least 10?ch year.

Relevant data:

• The company makes sales to Country E whose currency is the E$. It also makes sales to Country F whose

currency is the F$.

• All purchases are from Country G whose currency is the G$.

• The settlement of all transactions is in the currency of the customer or supplier.

Which of the following changes would be most likely to help the company achieve its objective?

A : D$ strengthens against the E$ over time.

B : F$ weakens against the D$ over time.

C : D$ strengthens against the G$ over time.

D : D$ weakens against the G$ over time.

Answer: C

Question 5

A listed company in a high growth industry, where innovation is a key driver of success has always operated a

residual dividend policy, resulting in volatility in dividends due to periodic significant investments in research

and development.

The company has recently come under pressure from some investors to change its dividend policy so that

shareholders receive a consistent growing dividend. In addition, they suggested that the company should use

more debt finance.

If the suggested change is made to the financial policies, which THREE of the following statements are true?

A : may give a signal to the market that the company is entering a period of stable growth.

B : ere may be a change to the shareholder profile due to 'the clientele effect'.

C : directors will not have to take shareholder dividend preferences into consideration in future.

D : tained earnings have a lower cost than debt finance.

E : company's financial risk will increase due to its increased use of debt finance.

Answer: A,B

Page: 1 / 61

Total 305 Questions | Updated On: Aug 18, 2026

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