- (Topic 1)
To minimize me risk of a two-stock portfolio, a company should most likely purchase stocks that have

1. A. negatively correlated expected returns
2. B. positively correlated expected returns
3. C. equally correlated expected returns
4. D. no correlated expected returns

Correct Answer: A

- (Topic 1)
The Transformer Division of Keller Electrical Supply IS developing its Budget for next year Preliminary estimates for the next year are as follows.
• Sales of 10.000 units
• Variable cost of $350 per unit
• Fixed costs of $800,000
. Net assets utilized on the Transformer Division are $7 million
• Target rate of return on investment required by Keller is 15%
If the Transformer Division utilizes cost-based pricing and uses a markup based on its target rate of return, what price per unit (rounded to the nearest dollar) should it use for the budget?

1. A. $430
2. B. $495
3. C. $506
4. D. $535

Correct Answer: D

- (Topic 1)
If a CMA is asked to conduct a financial assessment of a company owned by a close relative, what would be the proper response under the credibility standard of the IMA Statement of Ethical Professional Practice?

1. A. Advise all parties of a potential conflict of interest
2. B. Keep information confidential except when authorized By the relative
3. C. Communicate the existence of a constraint that might preclude responsible judgment
4. D. Provide an assessment that is timely and accurate despite the personal relationship

Correct Answer: A

- (Topic 1)
IF a company does not have a code of conduct, the company most likely

1. A. is missing important guidance on ethical decision making
2. B. will lack an expressed statement of values regarding ethical behavior
3. C. can use its statement of values instead to implement ethics in daily decision making
4. D. must find another way to express its ethical principles

Correct Answer: A

CORRECT TEXT - (Topic 2)
Should OLI accept the proposal from the regional airline? Show your calculations Essay
Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country. It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is
€300 per student, and the total fixed cost of the new course is €300.000 per year OLI spent
€200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI's highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.
Solution:
Yes the order can be accepted as the price offered is above the variable cost of 300, hence it will make a contribution of 50 per enrollment and should be accepted

Does this meet the goal?

1. A. Yes
2. B. No

Correct Answer: A