CIMA BA1 - Fundamentals of Business Economics

A magazine currently has a circulation of 500,000 copies per year at a price of $5 per copy Following a market survey it has been suggested that the price of each copy should be reduced to $4 50. It is expected this will lead to an increase in circulation of 25.000 copies per year.

What is the price elasticity of demand of the magazine?

Which of the following organisational arrangements is an example of a multinational corporation (MNC)?

Futures are like forwards in that:

A government issues a security which promises to pay $100 per year indefinitely. What is it worth if the required rate of return is..

Which TWO of the following are positive impacts for a national economy which hosts a multinational company's (MNC) production facilities within their country"?

Company A is looking to protect itself from transaction exchange rate risk.

Company A does not require 100% of the value of transaction to be protected, and it would like the method it uses to have the following characteristics

• An agreed exchange rate for a specified period where both parties have a legal obligation

• A separation of the contract guaranteeing the pnce of the currency from the underlying transaction.

Which of the following would best provide the type of protection from exchange rate risk company A wants?

Which of the following would tend to make the market supply of a good price inelastic?

Based on the past twenty months, an event decorating company develops a trend equation for forecasting sales revenue (y) where y = 4.38 + 1.32x.

If month 21 has a seasonal factor of times 1.07, then what is the forecast for the month, using a multiplicative model? Give your answer to two decima places.

Beth wants to take out an annuity in order to be able to leave more money to her children when she passes away. She has looked at three annuities with different payout rates.

Annuity A pays out £5340 each year over 14 years

Annuity B pays out £4900 each year over 9 years

Annuity C pays out £5445.64 each year over 20 years

The current interest rate is 8%.

Of these, which annuity would have the highest net present value and hence pay out more money for Beth over its lifetime?

Best for Beer is a brewery based in the UK. In the last year, it has seen its sales decrease by 23%. During the same period, the British Government has launched and run a public health campaign against excessive

alcohol consumption due to the rising number of incidents related to excessive alcohol consumption or 'binge-drinking' in the country.

Which of the following sources would be most relevant for Best for Beer to discover more about the public health campaign's effect on sales?