CIMA CIMA Certifications CIMAPRO17-BA1-X1-ENG Questions & Answers

• Question 51:

  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.

  Correct Answer: D

  Reference: https://www.investopedia.com/ask/answers/040115/what-are-some-examples-expansionary-monetary-policy.asp

• Question 52:

  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.

  Correct Answer: D

• Question 53:

  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)

  Correct Answer: B

  Reference: http://www.cimaglobal.com/Documents/Student%20docs/2010%20syllabus%20docs/F3/F3%20May%202014%20-%20Answers%20for%20web.pdf

• Question 54:

  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

  Correct Answer: D

• Question 55:

  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.

  Correct Answer: ABD

• Question 56:

  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.

  Correct Answer: B

• Question 57:

  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.

  Correct Answer: C

• Question 58:

  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.

  Correct Answer: A

  Reference: https://www.acowtancy.com/textbook/cima-f3-2015/a1a-financial-and-non-financial-objectives/types-of-organisations-copy1/notes

• Question 59:

  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.

  Hot Area:

  

  Correct Answer:

  

• Question 60:

  DRAG DROP

  Complete the table inputting the relevant effect for each of the scenarios listed.

  Select and Place:

  

  Correct Answer: