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CIMA Certificate
BA1
Fundamentals of Business Economics Questions and Answers

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Viewing page 10 out of 14 pages

Viewing questions 91-100 out of questions

Questions # 91:

Betsy's Fish Foods Pic. has issued shares in a prospectus.

Which of the following are benefits of selling shares in this manner?

Select ALL that apply.

Options:

It allows companies to open up its investor base

It allows more investors to receive profits in the form of dividends from the company

It allows the company to sell shares at a discounted price

It allows the company to sell shares to larger private firms who can invest more money into the company

It allows the company to sell second-hand shares

Answer

A, B

Questions # 92:

The management of Pennyfarthing's Toy Bazaar requires financial advice, but is unsure of which type of bank to approach to acquire this. The company receives a profit of £1,000,000 a year, and currently operates in

Europe and North America.

Which of the following reasons explains why Pennyfarthings Toy Bazaar should use a wholesale bank?

Options:

It has a profit of £100,000

It has international operations

It uses the Alternative Investment Market

It has issued new shares to members of the public

It is a medium-sized business

Answer

A, B

Questions # 93:

VapNat, an e-cigarette store, has experienced a steep decline in sales over the past six months, despite the economy in general performing well.

Which of the following are most likely to have contributed to such a decline?

Select ALL that apply.

Options:

Social factors

Tech nological factors

Legal factors

Environmental factors

Political factors

Economic factors

Answer

A, B, C

Questions # 94:

Peter holds his current and savings accounts with Western Mutual.

Which of the following is a benefit that Peter should expect to enjoy from possessing accounts with Western Mutual?

Options:

As a mutual organisation, Western Mutual will prioritise Peter's welfare over profits to be made

Peter will receive dividends from Western Mutual as he possesses accounts there

Peter will be able to make key decisions about Western Mutual as one of their customers

External shareholders in the organisation will be prioritised above Peter

Answer

Questions # 95:

Government X has just increased taxes in order to limit spending and hence demand.

Which of the following is most likely to have been the cause of this fiscal policy?

Options:

An inflationary gap, where demand outstrips output

A drop in prices caused by other fiscal policy instruments, e.g. a reduction in business taxes

The attainment of full employment within the economy

The contraction of the national economy

Answer

Questions # 96:

A business has a contractual requirement to pay a sum of$6m in a foreign currency in 12 months time. It takes out a forward exchange contract from this sum.

Options:

This is an example of

Translation risk avoidance

Arbitrage

hedging

Answer

Questions # 97:

Bishops Financial Services has outsourced its HR Department to Resources4U.

Which of the following is most likely to be considered when deciding to outsource parts of the business to another company?

Options:

Resources4U's lack of business history

The cost of increasing the number of staff on the payroll

The small size of Bishops Financial Services as a business

The possibility of contract renegotiation at a future date

Answer

Questions # 98:

The Lingford Miracle Association is a registered charity. It is closely associated with Lingford General Hospital. The charity has a number of goals.

Which of the following could potentially be goals set out by the Lingford Miracle Association given the information about the organisation that has been outlined?

Options:

To provide care for those who are terminally ill

To maintain a reasonable profit which can then be given as dividends to shareholders

To use the funding provided by government to further the primary cause of the organisation

To offer bonuses to the managing director of the organisation when a certain number of sales is reached in a year

To encourage members of the public to invest in the organisation through buying shares

Answer

Questions # 99:

Mrjohnson, the managing director of Brilliant Buys, wants to plot the cumulative sales figures for each store nationwide over the course of a year on a graph. The sales by store are shown below:

Question # 99

If these figures were plotted on an ogive, what would the line of cumulative frequency look like?

Options:

Rises until it reaches sales of £900,000 or less on the x axis, then declines

Rises until it reaches halfway between sales of £700,000 and £900,000 on the x axis, then declines

Rises until it reaches 43 stores on they axis, then declines

Rises until it reaches 43 stores on the x axis, then declines

Answer

Questions # 100:

A trade agreement that removes all import tariffs between member countries, sets up common external tariffs against non-members, but does not advance toward economic integration is called