Pass BA1 Exam Guide

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Question 8

The company flowbo Ltd. currently owns 25 bonds with a total nominal value of £1,000. The bill rate is currently 7%. The market value of the bonds is currently 14.5% higher than the nominal value of each individual bond

plus the bill rate.

Which of these is the difference between the nominal value of the bonds plus the bill rate payout and the market value of each bond?

Express your answer in whole pounds.

Options:

£1,021

£1,070

£1,225.15

£1,155.12

Question 9

The country Messu Potami is a key exporter of steel. However, its prominence as a steel exporter is partially due to its manipulating of exchange rates by buying large amounts of other countries' currencies.

How best can neighbouring countries prevent the cheap exports produced by Messu Potami from affecting their own domestic markets?

Options:

Impose a fixed tariff on imports coming from Messu Potami

Impose an embargo on imports coming from Messu Potami

Negotiate a VERA which would restrict the amount of Messu Potamian products entering these countries' domestic markets

Provide a subsidy to markets directly competing with Messu Potamian exports to eliminate any unfair competition

Question 10

RubTech has decided to build a new rubber production facility just outside the semi-rural town of Pettisbury. The majority of workers at the plant are to be sourced from abroad.

Which of the following could potentially be negative externalities of the decision to build the production facility?