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CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 84 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam
Question #: 84
Topic #: 1
[All CIMAPRA17-BA1-1 Questions]

Which of the following describes the effect an interest rate rise may have on a company?

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Suggested Answer: C

by Ryan at Apr 11, 2024, 03:34 AM

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Juliann
8 months ago
I see your point, but I still think option C is the most accurate. It directly relates to the cost of financing projects through loans.
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Elden
8 months ago
That's an interesting point. Higher interest rates can indeed lead to increased inflation, impacting pricing strategies.
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Long
8 months ago
I'm not so sure. I think option A could also be correct because higher interest rates may lead to increased inflation, causing companies to raise prices.
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Juliann
8 months ago
I agree with Candidate 1. Option C makes sense because companies will have to pay more interest on any loans they take out.
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Elden
8 months ago
I think the answer is C because higher interest rates mean higher costs for companies taking out loans.
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Rebecka
9 months ago
I agree with Beata. Higher interest rates can lead to higher costs for companies looking to finance projects.
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Beata
9 months ago
I think C is the correct answer because when interest rates rise, borrowing money becomes more expensive.
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Cristina
9 months ago
D) The cost of holding stock will reduce
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Elinore
10 months ago
A) Prices will have to increase due to increased inflationary pressures
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Jani
10 months ago
C) The cost of financing projects through loans will increase
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Wenona
10 months ago
Haha, yeah right. Stable incomes in the short term? Good one. With interest rates rising, I doubt consumers will be feeling too stable or eager to spend money.
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Chi
11 months ago
Hold up, what about option B? If consumers have stable incomes in the short term, that could actually increase sales for companies, right? Wouldn't that be a positive outcome?
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Elvera
11 months ago
Hmm, that's a good point. But I think option C is still the most direct and significant impact of an interest rate rise. Increased financing costs are harder to offset than just raising prices.
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Refugia
11 months ago
I'm not so sure. What about option A? Increased inflationary pressures could also force companies to raise their prices, which could have a significant impact on their operations and profitability.
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Kasandra
11 months ago
I agree with Sunshine. Option C is definitely the right answer here. Higher interest rates mean higher borrowing costs for companies, which can really hurt their bottom line and ability to invest in growth.
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Sunshine
11 months ago
Hmm, this question seems pretty straightforward. I think the correct answer is C - the cost of financing projects through loans will increase. An interest rate rise will make it more expensive for companies to borrow money, which will impact their ability to fund new projects and expansions.
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Oneida
9 months ago
I don't think so, because inflation and interest rates are not the same thing
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Jose
9 months ago
But wouldn't A also be true, as prices often increase with inflation?
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Carry
10 months ago
I agree with you, C is the correct answer
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