Pass E3 Exam Guide

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Question 32

QR is a conglomerate with two divisions, A and B. Given the information below, select the most appropriate strategy for each division to implement.

Options:

Question 33

BCA is a long established international airline. Which of the following represent Threats to BCA's business? (Choose all that apply.)

Options:

A sudden increase in international terrorism.

A substantial rise in the price of oil.

A higher level of private car ownership.

Greater popularity of long-haul holidays.

A shortage of trained pilots in BCA.

Question 34

As a qualified Management Accountant you have been asked by a non-financial manager to explain the CEO's recent comments, featured in the CEO's regular update to investors and analysts.

The CEO's update suggested the company, an established property development business, was about to pursue an exciting strategy. The strategy is to focus on conglomerate diversification, to be achieved through a number of pre-identified acquisitions, with the aim of significantly increasing shareholder value.

Which of the following statements is consistent with the concept of conglomerate diversification?

Options:

A strategy involving business expansion within a company's present industry. For this company, an example would be the acquisition of another property development business.

A structure involving a collection of unrelated businesses. For this company, acquisitions may include a variety of companies such as financial services and food retailing, all sharing operational relationships such as finance, sales and marketing.

A portfolio of unrelated businesses such as financial services, food retailing and property development, all sharing identity and risk, including group logo, corporate uniforms and risk management systems.

A portfolio of businesses involved in unrelated activities such as financial services, food retailing and property development, sharing nothing but a parent company.

Question 35

Which of the following is NOT a fundamental principle specified in CIMA's Code of Ethics?