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CIMAPRA17-BA1-1 Exam - Topic 1 Question 78 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam
Question #: 78
Topic #: 1
[All CIMAPRA17-BA1-1 Questions]

All other things remaining equal, which of the following would encourage a speculative short-term capital flow into a country's currency?

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Suggested Answer: C

by Johnna at Dec 11, 2023, 12:45 AM

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Craig
5 months ago
C makes sense, removing controls opens the door for more investment!
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Joye
5 months ago
A fall in interest rates usually means less attraction for capital, right?
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Yvonne
5 months ago
Wait, I thought lower interest rates would scare off investors?
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Marti
5 months ago
I disagree, B seems more likely to attract short-term flows.
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Lai
5 months ago
C is definitely the right choice!
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Caitlin
6 months ago
D seems off to me; while new factories might indicate long-term investment, I don't think it directly encourages short-term capital flow.
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Ligia
6 months ago
C sounds familiar because I think removing exchange controls can attract investment, but I can't recall if it specifically relates to short-term capital flows.
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Arlette
6 months ago
I feel like B might be correct since an expected depreciation could make investors want to sell off quickly, but I'm not entirely sure.
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Rory
6 months ago
I remember that a fall in interest rates usually discourages capital inflow, so I think A is definitely not the answer.
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Sunny
6 months ago
I think the key here is to focus on what would make the currency more attractive for short-term, speculative investors. An expected depreciation or the removal of capital controls seem like the best bets to encourage those kinds of flows. I'll go with one of those two.
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Cyndy
6 months ago
Okay, let's see. A fall in interest rates would make the currency less attractive for investors seeking higher returns, so that's out. An expected depreciation would encourage speculative inflows to profit from the drop, so that's a good option. Removing exchange controls would also open the door for more short-term investment, so that's another possibility.
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Ethan
6 months ago
This seems like a straightforward question about factors that would encourage short-term capital flows into a country's currency. I'll need to think through the economic principles at play here.
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Annamae
6 months ago
Hmm, I'm a bit unsure about this one. I know interest rates, exchange rate expectations, and capital controls are all important factors, but I'm not totally confident in how they would impact short-term speculative flows.
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Abraham
6 months ago
Hmm, not sure about this one. The options seem a bit broad - I'll need to think carefully about which one best captures the core value of documented procedures.
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Elvera
6 months ago
I'm a bit confused on the implications of the bank knowing about the certification requirement. Does that change the bank's responsibilities somehow? I'll need to think through that more.
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Allene
6 months ago
This question looks straightforward, but I want to make sure I understand all the details before I start calculating anything.
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Jaime
6 months ago
Okay, I think I've got this. A multi-layer control plane's main advantage is that it minimizes human error when configuring converged networks, which is option B. I'm confident that's the right answer.
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Erin
6 months ago
I think the net carrying amount after two years should definitely include the revaluation. It reminds me of that practice question we did about asset valuations.
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Luther
11 months ago
If you really want to encourage speculative capital, just start a rumor about aliens landing and offer to sell them the country. Instant currency boom!
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Corinne
10 months ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
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Christiane
10 months ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
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Ashton
10 months ago
B) An expected depreciation of the country's exchange rate
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Amira
10 months ago
B) An expected depreciation of the country's exchange rate
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Jacqueline
10 months ago
A) A fall in the country's interest rates
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Alyssa
10 months ago
A) A fall in the country's interest rates
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Holley
11 months ago
Multinational companies setting up factories? That's long-term investment, not the kind of speculative flow they're asking about. C is the clear winner.
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Jess
10 months ago
B) An expected depreciation of the country's exchange rate
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Hoa
10 months ago
A) A fall in the country's interest rates
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Raina
10 months ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
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Levi
12 months ago
Exchange rate depreciation? That's just a recipe for a currency crisis. C is definitely the way to go.
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Emmanuel
10 months ago
I see your point. It's all about creating a more open and attractive investment environment.
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Paris
11 months ago
True, but removing exchange controls would have a more immediate impact on speculative flows.
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Madalyn
11 months ago
But wouldn't a fall in interest rates also attract short-term capital?
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Emile
11 months ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
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Nickolas
12 months ago
A fall in interest rates might also encourage short-term capital inflows, but C seems like the best answer here.
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Albina
11 months ago
B: I agree, it makes sense that removing barriers to investment would attract more capital into the country.
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Paola
11 months ago
A: I think C is the best answer because abolishing exchange controls would definitely encourage short-term capital flow.
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Curtis
11 months ago
User 2: I agree, removing exchange controls would definitely encourage short-term capital flow.
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Hildred
11 months ago
User 1: I think C is the best answer.
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Lezlie
1 year ago
But wouldn't option D also attract capital flow by creating jobs and boosting the economy?
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Glen
1 year ago
I agree with Hui, removing exchange controls would attract investors.
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Yuriko
1 year ago
C is the correct answer. The abolition of exchange controls would encourage speculative short-term capital inflows.
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Deonna
11 months ago
D) Foreign-based multinational companies locating new factories in the country
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Allene
11 months ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
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Mitzie
11 months ago
B) An expected depreciation of the country's exchange rate
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Donette
11 months ago
A) A fall in the country's interest rates
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Hui
1 year ago
I think option C would encourage short-term capital flow.
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