Financial The Certified Internal Auditor Part 3 CIA-III Dumps in PDF

Free Financial CIA-III Real Questions (page: 47)

Only two companies manufacture Product A. The finished product is identical regardless of which company manufactures it. The cost to manufacture Product A is US $1, and the selling price is US $2. One company considers reducing the price to achieve 100c'% market share but fears the other company will respond by further reducing the price. Such a scenario would involve a:

  1. No-win strategy.
  2. Dual-win strategy.
  3. One win-one lose strategy.
  4. Neutral strategy.

Answer(s): A

Explanation:

If bath firms reduce the selling price of Product A, neither will gain sales and the resultant price war will cause bath firms to earn lower profits. This outcome is inevitable when reduced profit margins do not result in a significant increase in sales. The effect is a no-win strategy. A bank has two drive-in lanes to serve customers: one attached to the bank itself and one on an island. One teller serves bath stations. The bank is interested in determining the average waiting times of customers and has developed a model based on random numbers. The two key factors are the time between successive car arrivals and the time customers wait in line. Assume that the analysis begins with cars just arriving at bath service windows. bath requiring 3 minutes of service time. Car 1 is the attached window attached to the bank unless that window has more cars waiting than the island window. The lone teller will always serve the car that arrived first. If two cars arrive simultaneously, the one at the attached window will be served before the one at the island.



The arrival time follows which probability distribution?

  1. Binomial
  2. Chi-Square
  3. Poisson
  4. Exponential

Answer(s): C

Explanation:

Queuing models assume that arrivals follow a Poisson process: the events arrivals) are independent, any number of events must be possible in the interval of time, the probability {of an event is proportional to the length of the interval, and the probability {of more than one event is negligible if the interval is sufficiently} small. If is the average number of events in a given interval, k is the number of events, and e is the natural logarithm 2.71828...), the probability of k is. f K) = k e - k !
A bank has two drive-in lanes to serve customers: one attached to the bank itself and one on an island. One teller serves bath stations. The bank is interested in determining the average waiting times of customers and has developed a model based on random numbers. The two key factors are the time between successive car arrivals and the time customers wait in line.
Assume that the analysis begins with cars just arriving at bath service windows bath requiring 3 minutes of service time. Car 1 is the attached window attached to the bank unless that window has more cars waiting than the island window. The lone teller will always serve the car that arrived first. If two cars arrive simultaneously, the one at the attached window will be served before the one at the island.



The time that car 3 will have to wait to be serviced:

  1. 0-2 minutes.
  2. 3 minutes.
  3. 4 minutes.
  4. 5+ minutes.

Answer(s): C

Explanation:

Car 1 is at the attached window and will require minutes to service. Car 2 must wait for car 1 to be serviced minutes the queue + minutes to be serviced = 6 minutes). Car arrived at the attached window minutes after cars 1 and . It must wait 1 minute for car 1 to be serviced and minutes for car to be serviced, a waiting time of 4 minutes. A bank has two drive-in lanes to serve customers:
one attached to the bank itself and one on an island. One teller serves bath stations. The bank is interested in determining the average waiting times of customers and has developed a model based on random numbers. The two key factors are the time between successive car arrivals and the time customers wait in line. Assume that the analysis begins with cars just arriving at bath service windows. bath requiring 3 minutes of service time. Car 1 is the attached window attached to the bank unless that window has more cars waiting than the island window. The lone teller will always serve the car that arrived first. If two cars arrive simultaneously, the one at the attached window will be served before the one at the island.



The time that car 4 will have to wait to be:

  1. 0-2 minutes.
  2. 3 minutes.
  3. 4 minutes.
  4. 5+ minutes.

Answer(s): C

Explanation:

Car 4 arrives at the just-vacated island window 4 minutes after car. It must wait 4 minutes for car to be serviced.



The decision rule that selects the strategy with the highest utility payoff if the worst state of nature occurs is the

  1. Minimize regret rule.
  2. Maximize utility rule.
  3. Maximin rule.
  4. Maxi max rule.

Answer(s): C

Explanation:

The maximin rule determines the minimum payoff for each decision and then chooses the decision with the maximum minimum payoff. It is a conservative criterion adopted by risk averse players, that is, those for whom the disutility of a loss exceeds the utility of an equal gain.



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