The long-term prospects for interest rates in the UK and the USA are 2% and 6% per annum respectively.
The GBP/USD spot rate is currently GBP/USD1.71.
Using interest rate parity theory, what GBP/USD spot rate would you expect to see in six months' time?

• A. GBP/USD = 1.67
• B. GBP/USD = 1.65
• C. GBP/USD = 1.74
• D. GBP/USD = 1.78

AZX sells electrical components.
AZX's annual turnover is S24 million. Half of all sales are on 30 days' (1 month) credit
5% of credit sales have to be written off as unrecovered debt
25% of such write off is subsequently recovered through debt collection and legal action.
What is the expected loss each year due to credit risk?

• A. $900,000
• B. 51,200,000
• C. S450,000
• D. $600,000

B is a horticultural retailer with limited funds available to acquire new retail property.
B's Finance Manager has analysed two potential property investments. Investing in property P shows an IRR of 21% while the IRR on property Q is 17%.
The Finance Manager has also advised that the NPV for property P is $750K, while the NPV of property Q is
$850K.
The Board needs to choose between the two properties as it has insufficient funds for both. Based purely on the Finance Manager's analysis, which of the following is true?

• A. Premises P is clearly better than property Q in all respects.
• B. Board members who wish to maximise return on capital employed will want property Q while those who wish to maximise shareholder wealth will want property P.
• C. Board members who wish to maximise return on capital employed will want property P while those who wish to maximise shareholder wealth will want property Q.
• D. Premises Q is clearly better than property P in all respects.

HBN is a service company that offers cloud-based data storage and management on behalf of clients HBN pays an independent accountancy firm to review its cybersecurity arrangements, conduct penetration tests and report to HBN's Board on the results Which TWO of the following are correct?

• A. The independent accountancy firm will disclose all of the shortcomings that it identifies in its report, even if they embarrass HBN
• B. The independent accountancy firm will guarantee that there are no control weaknesses in HBN's systems, provided its results prove satisfactory
• C. HBN could save time and reduce cost by having its own internal audit department conduct these investigations and report accordingly.
• D. Potential clients for HBN's services will expect to receive copies of these independent reports immediately after they are submitted.
• E. It would prove simpler for HBN to permit clients to conduct their own cybersecurity reviews that would take account of the sensitivity of their data

IOP manufactures aircraft engines. The company is presently engaged in a scenario planning exercise to consider the implications of a possible ban on the use of fossil fuels by the year 2040.
Which TWO of the following would be realistic responses to the scenario?

• A. Develop more efficient engines that minimise the use of fossil fuels
• B. Adapt existing engine designs so that they can use plant-based fuels, such as vegetable oils
• C. Work with politicians to discredit the proposed restrictions on the use of fossil fuels
• D. Commission research into the development of battery-powered aircraft
• E. Dispose of manufacturing plant and move into more sustainable transport, such as electric trains