Which of the following will NOT affect the price elasticity of supply?
- A . The time period considered.
- B . Production costs.
- C . The level of stocks.
- D . Proportion of income spent.
Which of the following is a primary objective of a not-for-profit organization?
- A . To satisfy the needs of a particular sector of society.
- B . To maintain the growth of the organization.
- C . To make a profit.
- D . To continue to exist.
A
Explanation:
Reference: https://www.acowtancy.com/textbook/cima-f3-2015/a1a-financial-and-non-financial-objectives/ types-of-organisations-copy1/notes
Quantitative easing, the purchase of government or private securities by the central banks from investors, is an example of:
- A . contractionary monetary policy.
- B . contractionary fiscal policy.
- C . expansionary fiscal policy.
- D . expansionary monetary policy.
D
Explanation:
Reference: https://www.investopedia.com/ask/answers/040115/what-are-some-examples-expansionarymonetary-policy.asp
A commercial airline uses its database to develop the following regression model to predict the cost of a flight Y (in dollars) by number of passengers:
Y = 1,570 + 40.7x
Which of the following statements is correct in relation to the airline?
- A . The cost of a flight will increase by $40.7 when an additional passenger is added to the flight.
- B . The regression model makes accurate predictions for this commercial airline, therefore it will provide good forecasts for other commercial airlines.
- C . The positive intercept in the model indicates a positive relationship between the cost of a flight and the number of passengers.
- D . If each pair of data points is plotted on a graph with Y on the vertical axis and X on the horizontal axis, there will be a downward sloping line.
Which of the following is correct in relation to businesses?
In order to maximize shareholder wealth, the primary objective of a business can be reflected in:
(1) higher investment
(2) higher sales revenue
(3) higher share prices
(4) higher dividend payments.
- A . (1) and (3)
- B . (3) and (4)
- C . (1) and (2)
- D . (2) and (4)
B
Explanation:
Reference: http://www.cimaglobal.com/Documents/Student%20docs/2010%20syllabus%20docs/F3/F3%20May%202014%20-%20Answers%20for%20web.pdf
FILL BLANK
A business analyst has computed a trend regression for the sales of company X. The following table reports the ratios between the actual quarterly sales of company X and the calculated trend, for a period of four years.
What is the seasonal component in the fourth quarter? Give your answer to three decimal places.
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 foreign exchange contract for this sum.
This is an example of:
- A . translation risk avoidance
- B . economic risk reduction
- C . arbitrage
- D . hedging
Which THREE of the following businesses are more likely to fare better during a recession? (Choose three.)
- A . A construction company specializing in road infrastructure.
- B . A producer of rice, a staple good.
- C . A producer of automobiles, a durable good.
- D . A producer of security equipment, a counter-cyclical good.
- E . A retailer specializing in fashion, a cyclical good.
- F . A construction company specializing in private residential accommodation.
HOTSPOT
The economy of Country V is initially in equilibrium at a level of national income and employment denoted by Y at price level denoted by P1.
If there is an increase in aggregate demand, indicate on the graph below the new equilibrium point in the economy.
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:
- A . an economic union.
- B . a customs union.
- C . a free trade area.
- D . a common market.
A clothes retailer has estimated a linear trend equation including trend, seasonal and cyclical components to forecast its sales for the next four quarters.
Which of the following factors would generate actual sales figures that are likely to differ markedly from the forecast?
- A . A drop in sales due to emergency roadwork blocking access to the store.
- B . A drop in sales due to the ongoing economic recession.
- C . An increase in sales due to the increasing popularity of their brand.
- D . An increase in sales before a major religious festival.
In recent years, consumer groups have become more vocal in calling for the boycott of producers whose suppliers do not comply with international regulations on workplace safety and child labour.
A fashion company that outsources its production to low labour cost countries should include this phenomenon in which part of their PESTEL framework?
- A . Т
- B . E
- C . S
- D . P
C
Explanation:
Reference: https://thecimastudent.com/2018/02/15/using-pestel-analysis/
Company A owns a factory in a foreign country.
Which of the following types of exchange rate risk is company A most likely to experience in relation to the value of the factory?
- A . Economic risk
- B . Energy risk
- C . Transaction risk
- D . Translation risk
D
Explanation:
Reference: https://webcache.googleusercontent.com/search?q=cache:rUr_SO58tB8J:https:// www.acowtancy.com/textbook/cima-ba1/d3-impact-of-changes-in-interest-and-exchange-rates-oncontrolling-and-measuring-business-performance/impact-of-exchange-rate-changes/notes+&cd=1&hl=en&ct=clnk&gl=pk&client=opera
FILL BLANK
An estimation regression is developed to test the linear relationship between the size of student population at a university and monthly sales of a nearby bookshop. The correlation coefficient is equal to 0.9.
Calculate the coefficient of determination to two decimal places:
A manufacturing company is considering a new investment project.
Which TWO of the following would reduce the net present value of the investment to the business? (Choose two.)
- A . A rise in the scrap value of the project at the end of its life.
- B . A reduction in the expected level of future sales.
- C . A rise in interest rates.
- D . A fall in the initial capital cost of the project.
- E . An expected fall in the future price of components used by the business.