IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 991:

  A PERT network has only two activities on its critical path. These activities have standard deviations of 6 and 8, respectively. The standard deviation of the project completion time is

  A. 7

  B. 10

  C. 14

  D. 48

  Correct Answer: B

  The mean time forth critical path is simply the sum of the means of the activity times. However, the standard deviation equals the square root of the sum of the variances (squares of the standard deviations) of the times for activities on the critical path. The standard deviation of the project completion time (time for the critical path) is therefore the square root of 100 (62 + 82), or 10.

• Question 992:

  The risk of a single asset is

  A. Nonmarket risk

  B. Total risk

  C. Portfolio risk

  D. Market risk

  Correct Answer: B

  Total risk is the risk of a single assets, whereas market is its risk if is held in a large portfolio of diversified securities. total risk therefore includes diversifiable and undiversifiable risk

• Question 993:

  Assume that a probability can be assigned to each possible outcome of a decision, the outcomes are theoretically infinite, and the graph describing the probabilities is bell- shaped, symmetrical,and centered about the mean. this probability distribution is best described as

  A. Discrete and normal

  B. Discrete but not normal

  C. Continuous and normal

  D. Continuous but not normal

  Correct Answer: C

  A probability distribution is the set of all possible outcomes of a decision, with a probability assigned to each outcome. for example, a simple probability distribution might be defined for the possible returns on a stock investment. a different return could be estimated for each of a limited number of possible states of the economy, and a probability could be determined for each state. Such a probability distribution is discrete because the outcomes are limited. a continuous distribution is one for which outcomes are theoretically infinite. the normal distribution is the best-known continuous distribution. the normal distribution has a symmetrical, bell-shaped curve centered about the mean.

• Question 994:

  An Asset with high risk will have a (n)

  A. Low expected return

  B. Lower price than an assets with low risk

  C. Increasing expected rate of return

  D. High standard deviation of returns

  Correct Answer: D

  The greater the standard deviation of the expected return, the riskier the investment. a large standard deviation implies that the range of possible return is wide,i.e.,the probability distribution is broadly dispersed.converely,the smaller the standard deviation, the tighter the probability distribution and the lower the risk.

• Question 995:

  All of the following steps should be taken to help minimize risk and maximize profits associated with expanding into foreign markets except?

  A. Breaking branding partnerships.

  B. Understanding how diverse markets can come together to form a global branding landscape.

  C. Developing integrated marketing communications.

  D. Developing local guidelines so that local sales and profit goals are met.

  Correct Answer: A

  The firm may create branding partnerships. Global firms often form alliances with local distribution channels to increase the profitability while decreasing their marketing costs.

• Question 996:

  Mercosul is a free-trade agreement among South American nations, What two nations are on associate members?

  A. Bolivia and Chile.

  B. Argentina and Boliria.

  C. Argentina and Chile.

  D. Argentina and Paraguay.

  Correct Answer: A

  Mercosul is a free-trade agreement among South American nations. They include Argentina, Brazil, Uruguay, and Paraguay. Chile and Bolivia are associate members.

• Question 997:

  Which strategy is characterized by the creation of a new product specifical for a certain market or region of the world?

  A. Straight extension.

  B. Product adaptation,

  C. Communication adaptation.

  D. Product invention.

  Correct Answer: CD

  Using a product invention strategy, a new product is created specifically for a certain country or regional market. A product may either include advancements for developed countries or have certain elements removed in places wfiere a lower cost is a key selling point. Backward invention is the reintroduction of an earlier version of the product to meet local needs. This variant of the invention strategy reflects the possibility that different countries may be in different stages of the international product life cycle. Forward invention requires developing a new product for the unique needs of a foreign market.

• Question 998:

  Which of the following is not a characteristic of a multinational strategy adopted by a global marketing organization?

  A. The product is customized (or each market.

  B. Central control of the production process is strong.

  C. The strategy is most effective when there are strong differences between countries.

  D. Production costs incurred are higher than in a global or global strategy.

  Correct Answer: B

  A multinational strategy adopts a portfolio approach, lts emphasis is on national markets because the need for global integration is not strong. The product is customized for each market and therefore incurs higher production costs. Decision making is primarily local with a minimum of central control. The strategy is most effective given large differences between countries, Also, exchange rate risk is reduced when conducting business in this manner.

• Question 999:

  Licensing, a method of expanding into international markets,

  A. Occurs Vivien goods are produced in one country and sold in another.

  B. Is cooperation by two or more firms to produce a product that is sold under one brand name.

  C. Allows a foreign firm to produce products in a specific geographic area for a fee.

  D. Is the production of parts in one country and assembly in another.

  Correct Answer: C

  Licensing gives firms in foreign countries the nghtto produce or market products or services within a geographical area for a fee. Licensing a process, patent, trade secret, etc., is a way to gain a foothold in a foreign market with little immediate risk. However, the hcensor may have insufficient control over the licensees operations, profits are lost if the arrangement succeeds, and the licensee ultimately may become a competitor.

• Question 1000:

  Which barrier to global competition limits global procurement and achievement of economies of scale?

  A. The need for a direct sales force.

  B. Product needs.

  C. Resource impediments.

  D. Sensiflvityto lead times.

  Correct Answer: B

  Product needs may differ from country to county because of culture, climate, degree of economic development, income, legal requirements, technical standards, and other factors. This barrier limits the ability to achieve economies of scale in global procurement. The height of the barrier depends on the cost of product modifications.