Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

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

All other things remaining equal, which of the following would encourage a speculative short-term capital flow into a country's currency?
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
A) A fall in the country's interest rates
B) An expected depreciation of the country's exchange rate
D) Foreign-based multinational companies locating new factories in the country

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?

Show Suggested Answer Hide Answer
Suggested Answer: C

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

Limited Time Offer

25%

Off

Get Premium CIMAPRA17-BA1-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Craig
10 months ago
C makes sense, removing controls opens the door for more investment!
upvoted 0 times
...
Joye
10 months ago
A fall in interest rates usually means less attraction for capital, right?
upvoted 0 times
...
Yvonne
10 months ago
Wait, I thought lower interest rates would scare off investors?
upvoted 0 times
...
Marti
10 months ago
I disagree, B seems more likely to attract short-term flows.
upvoted 0 times
...
Lai
10 months ago
C is definitely the right choice!
upvoted 0 times
...
Caitlin
10 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.
upvoted 0 times
...
Ligia
11 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.
upvoted 0 times
...
Arlette
11 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.
upvoted 0 times
...
Rory
11 months ago
I remember that a fall in interest rates usually discourages capital inflow, so I think A is definitely not the answer.
upvoted 0 times
...
Sunny
11 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.
upvoted 0 times
...
Cyndy
11 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.
upvoted 0 times
...
Ethan
11 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.
upvoted 0 times
...
Annamae
11 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.
upvoted 0 times
...
Abraham
11 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.
upvoted 0 times
...
Elvera
11 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.
upvoted 0 times
...
Allene
11 months ago
This question looks straightforward, but I want to make sure I understand all the details before I start calculating anything.
upvoted 0 times
...
Jaime
11 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.
upvoted 0 times
...
Erin
11 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.
upvoted 0 times
...
Luther
1 year 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!
upvoted 0 times
Corinne
1 year ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
upvoted 0 times
...
Christiane
1 year ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
upvoted 0 times
...
Ashton
1 year ago
B) An expected depreciation of the country's exchange rate
upvoted 0 times
...
Amira
1 year ago
B) An expected depreciation of the country's exchange rate
upvoted 0 times
...
Jacqueline
1 year ago
A) A fall in the country's interest rates
upvoted 0 times
...
Alyssa
1 year ago
A) A fall in the country's interest rates
upvoted 0 times
...
...
Holley
1 year 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.
upvoted 0 times
Jess
1 year ago
B) An expected depreciation of the country's exchange rate
upvoted 0 times
...
Hoa
1 year ago
A) A fall in the country's interest rates
upvoted 0 times
...
Raina
1 year ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
upvoted 0 times
...
...
Levi
1 year ago
Exchange rate depreciation? That's just a recipe for a currency crisis. C is definitely the way to go.
upvoted 0 times
Emmanuel
1 year ago
I see your point. It's all about creating a more open and attractive investment environment.
upvoted 0 times
...
Paris
1 year ago
True, but removing exchange controls would have a more immediate impact on speculative flows.
upvoted 0 times
...
Madalyn
1 year ago
But wouldn't a fall in interest rates also attract short-term capital?
upvoted 0 times
...
Emile
1 year ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
upvoted 0 times
...
...
Nickolas
1 year ago
A fall in interest rates might also encourage short-term capital inflows, but C seems like the best answer here.
upvoted 0 times
Albina
1 year ago
B: I agree, it makes sense that removing barriers to investment would attract more capital into the country.
upvoted 0 times
...
Paola
1 year ago
A: I think C is the best answer because abolishing exchange controls would definitely encourage short-term capital flow.
upvoted 0 times
...
Curtis
1 year ago
User 2: I agree, removing exchange controls would definitely encourage short-term capital flow.
upvoted 0 times
...
Hildred
1 year ago
User 1: I think C is the best answer.
upvoted 0 times
...
...
Lezlie
1 year ago
But wouldn't option D also attract capital flow by creating jobs and boosting the economy?
upvoted 0 times
...
Glen
1 year ago
I agree with Hui, removing exchange controls would attract investors.
upvoted 0 times
...
Yuriko
1 year ago
C is the correct answer. The abolition of exchange controls would encourage speculative short-term capital inflows.
upvoted 0 times
Deonna
1 year ago
D) Foreign-based multinational companies locating new factories in the country
upvoted 0 times
...
Allene
1 year ago
C) The abolition by the country of previously-imposed exchange controls which deterred inward investment
upvoted 0 times
...
Mitzie
1 year ago
B) An expected depreciation of the country's exchange rate
upvoted 0 times
...
Donette
1 year ago
A) A fall in the country's interest rates
upvoted 0 times
...
...
Hui
1 year ago
I think option C would encourage short-term capital flow.
upvoted 0 times
...

Save Cancel