CIMA BA1 Exam Questions Free Practice Test

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Questions # 111:

Which of the following can be used by a national government as justification for introducing a protectionist trade policy?

Options:

To promote the development of an infant industry

To allow specialisation

To promote economies of scale

To increase competition.

Expert Solution

Questions # 112:

Which TWO of the following policy actions might be available to a government that wishes to reduce a deficit in the balance of payments?

Options:

Devaluate the exchange rate in order to increase exports.

Increase the money supply in order to stimulate domestic consumption.

Appreciate the exchange rate in order to reduce imports.

Reduce the interest rate in order to stimulate investment.

Introduce tariffs on imported goods in order to favour domestic producers.

Expert Solution

Questions # 113:

A railway franchise in north-eastern Messu Potami has recently changed hands, and is now being operated by the company IstClass. However, IstClass already operate the railway franchise in northwestern Messu

Potami.

Which of the following courses of action would be most appropriate for the government of Messu Potami to take?

Select ALL that apply.

Options:

Establish a regulatory body to prevent a regional monopoly

Rerun the franchise bidding process if it found that IstClass are imposing additional price rises due to the regional monopoly

Allow the regional monopoly to exist, increasing fare prices for passengers on trains in both north-western and north-eastern Messu Potami

Impose a uniform sales tax on all railway tickets which would equalise prices across the country

Immediately nationalise the railway network, ending all private franchises and thus any regional monopolies

Expert Solution

Questions # 114:

Which of the following is a primary objective of a not-for-profit organisation?

Options:

To satisfy the needs of a particular sector of society

To maintain the growth of the organisation.

To make a profit.

To continue to exist.

Expert Solution

Questions # 115:

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

Expert Solution

Questions # 116:

Country X is a country highly reliant on its oil exports. However, in recent months, oil prices have fallen by 20%. It is located near Country Y, an oil exporter which is a member of a trading bloc. Country X has some coal reserves, but faces stiff competition from Country Z, a member of the trading bloc, which also exports coal.

Which of the following would be the most effective way for the government to alleviate these circumstances?

Select ALL that apply.

Options:

Purchase oil produced within the country in order to support the domestic oil industry

Invest in retraining those working in the oil industry so they can enter other domestic industries which are currently more profitable

Dump its oil exports into the trading bloc by exporting the oil at an artificially low price

Begin extracting and exporting coal as a substitute for oil

Allow the oil industry in Country X without any further investment to fail as it is a sunset industry

Expert Solution

Questions # 117:

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

Expert Solution

Questions # 118:

The managing director of Polly's has been given a pie chart showing the current proportion of sales across the chain's five stores.

Question # 118

Which of the below are the most significant reasons why the pie chart is an inappropriate way of expressing this data?

Select ALL that apply.

Options:

It cannot be used to develop sales strategies moving forward

It does not give specific details as to which items sold in store are experiencing poor sales

It does not show the best and worst performing stores

It does not track sales over time

It does not show the store sales as raw figures

Expert Solution

Questions # 119:

Quantitative easing, the purchase of government or private securities by the central banks from investors, is an example of

Options:

contractionary monetary policy.

contractionary fiscal policy.

expansionary fiscal policy.

expansionary monetary policy.

Expert Solution

Questions # 120:

Brian has 80 bonds with a total market value of £2400. The interest rate on these bonds is 2.34%.

Using these figures, which of the following is the running yield of each of Brian's bonds?

Options:

8.87%

8.86%

8.9%

8.83%

Expert Solution

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