CIMA Strategic Level Practice Test

CIMA Strategic Level is the senior CGMA Professional Qualification level for strategy, risk, financial strategy, leadership, and enterprise-level business decisions.

Use these 12 original sample questions for initial self-assessment. If CIMA Strategic Level is the Finance Prep route you want next, use the Notify me form on this page.

What Strategic Level practice should test

• evaluating strategy, risk, finance, governance, and stakeholder trade-offs
• choosing senior recommendations that account for uncertainty and organizational impact
• integrating financial and non-financial evidence before selecting an answer
• preparing for the integrated Strategic Case Study route

Sample Exam Questions

These questions focus on senior-level judgement. The strongest answer usually integrates strategy, risk, finance, governance, and stakeholder consequences.

Question 1

Topic: strategic analysis

A business has high market share in a declining market and limited investment capacity. What is the strongest strategic concern?

• A. High market share alone guarantees future growth
• B. The company may need to manage cash, defend profitable niches, or redeploy resources rather than assume growth will continue
• C. Declining markets should never be served
• D. Investment capacity is irrelevant to strategy

Best answer: B

Explanation: Strategic analysis should consider market attractiveness and internal capacity. High share in a declining market may be valuable for cash generation but does not automatically justify growth investment.

Question 2

Topic: risk appetite

A board approves a risk appetite statement but continues accepting projects with risk levels outside the stated limits. What is the governance problem?

• A. Risk appetite is not being embedded into decision-making
• B. Risk appetite only matters after a loss
• C. Projects should never have risk
• D. The risk statement should be hidden from managers

Best answer: A

Explanation: A risk appetite statement has value only if it guides decisions. Accepting inconsistent projects shows a gap between governance intent and management action.

Question 3

Topic: funding strategy

A company funds long-term infrastructure assets with short-term debt because short-term rates are lower. What is the main risk?

• A. Too much equity financing
• B. Lower liquidity risk
• C. Maturity mismatch and refinancing exposure
• D. Reduced need for cash forecasting

Best answer: C

Explanation: Long-life assets generally need funding that matches the timing and risk profile of cash flows. Short-term debt may create refinancing pressure.

Question 4

Topic: dividend policy

A company wants to raise dividends after one unusually profitable year, but cash flow remains volatile and major reinvestment is needed. What should the board consider?

• A. Profit this year only
• B. Whether a higher dividend removes all financing risk
• C. Whether dividends should always equal accounting profit
• D. Dividend affordability, sustainability, investment needs, and shareholder expectations

Best answer: D

Explanation: Dividend policy is a long-term financial strategy decision. A one-year profit spike does not automatically support a permanent increase.

Question 5

Topic: governance

Senior executives receive bonuses based only on share price growth. The company is underinvesting in compliance and customer service. What is the governance concern?

• A. Incentives may encourage short-term value at the expense of sustainable performance and risk control
• B. Share price should always be the only measure
• C. Compliance cannot affect value
• D. Customer service is never strategic

Best answer: A

Explanation: Strategic governance includes incentive design. A narrow share-price measure can distort behavior if it ignores risk, compliance, and customer outcomes.

Question 6

Topic: strategic alliance

A partner offers access to a new technology platform but wants exclusive rights to customer data generated through the partnership. What should the company evaluate?

• A. Technology benefits only
• B. Whether the partner has a strong brand only
• C. Strategic fit, data ownership, privacy, bargaining power, exit rights, and long-term dependency
• D. Whether exclusivity always improves value

Best answer: C

Explanation: Strategic alliances can create value and dependency. Data rights, exit options, and control over customer relationships may be as important as the technology.

Question 7

Topic: sustainability risk

A profitable product relies on a material that may soon be restricted by environmental regulation. What should strategic management do?

• A. Ignore the risk until the regulation is final
• B. Assess substitution options, compliance exposure, customer impact, and investment timing
• C. Stop selling every product immediately
• D. Move the risk to marketing

Best answer: B

Explanation: Strategic risk management is proactive. The business should evaluate exposure and alternatives before a restriction becomes urgent.

Question 8

Topic: acquisition value

An acquisition case shows cost synergies but no plan for integrating systems, people, or controls. What is the best critique?

• A. Integration is unnecessary if the price is attractive
• B. Cost synergies always happen automatically
• C. Systems and people are not strategic
• D. The valuation may overstate value because synergy delivery is unsupported

Best answer: D

Explanation: Synergies are only valuable if the organization can deliver them. Integration planning is essential to acquisition value.

Question 9

Topic: scenario planning

A management team prepares one forecast for a market with high regulatory uncertainty. What should the board request?

• A. Approval of the single forecast
• B. Removal of uncertainty from the report
• C. Scenario analysis showing plausible regulatory outcomes and strategic responses
• D. A focus only on last year’s actual results

Best answer: C

Explanation: Scenario planning is useful where uncertainty is strategic and external. It helps the board decide what to do under different outcomes.

Question 10

Topic: value creation

A new digital product increases customer data but loses money in the first year. Which evidence best supports continued investment?

• A. Clear path to profitable scale, retention, data governance, and strategic fit
• B. Higher marketing spend only
• C. Management enthusiasm only
• D. First-year revenue only

Best answer: A

Explanation: Early losses may be acceptable if the business has evidence of future value creation and controls the risks. Strategic fit and governance still matter.

Question 11

Topic: ethics

A country manager suggests using a local agent to speed up permits but cannot explain the agent’s fee structure. What is the strongest response?

• A. Proceed because local agents always know the market
• B. Conduct due diligence and refuse unclear arrangements that may create bribery or compliance risk
• C. Pay the fee from a different budget
• D. Ask the agent to avoid written communication

Best answer: B

Explanation: Strategic decisions in new markets must consider ethical and compliance risk. Unclear agent fees are a warning sign requiring due diligence and possible refusal.

Question 12

Topic: strategic recommendation

Two strategies have similar expected returns. One is easier to execute but offers limited learning; the other is riskier but builds capabilities needed for the future. What should the recommendation compare?

• A. Expected return only
• B. Ease of writing the report
• C. Which project has fewer stakeholders
• D. Expected return, execution risk, strategic capability, downside exposure, and flexibility

Best answer: D

Explanation: Strategic-level decisions weigh financial return against capability and risk. The right answer does not pick solely on return or simplicity.

Related CIMA pages

• Strategic Case Study
• Management Level
• CIMA CGMA updates