CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 89 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 89
Topic #: 1

Based on a trade balance between Country A and Country B over a ten year period, the underlying trend of the trade balance is represent equation

-114.027 -1.47x

where x is the time period expressed in years.

Assuming an additive forecasting model, with a seasonal factor of 82 6, then the forecast for year 2016, in whole units is:

A-113968

B-113868

C-113768

D-113668

Show Suggested Answer

Suggested Answer: A

by Alonzo at May 30, 2024, 06:39 PM

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Vilma

7 months ago

This question is making my head spin. Seasonal factors, linear equations, and cryptic images - it's like they're trying to confuse us. But I'm not falling for it! I'm going with the simplest answer, which is C. And if I'm wrong, I'll just blame it on the question being too tricky.

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Peggy

7 months ago

Alright, time to put on my math hat. Okay, so we have a linear equation and we're asked to forecast for 2016. No need to overcomplicate this. Just plug in 2016 for x and boom, you got your answer. I'm going with B, the -113,868 option.

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Tish

5 months ago

Agreed, simple substitution gives us the answer.

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Rosalia

6 months ago

Yeah, just plug in 2016 for x and you'll get the forecast.

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Carlee

6 months ago

I think the answer is B) -113868

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My

7 months ago

I don't know, this question seems a bit fishy to me. Why are they asking about a seasonal factor when it's not mentioned in the equation? And what's with that weird image - is it supposed to be a clue or something? I'm gonna go with C just to be safe.

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Stevie

6 months ago

I'm going with C as well, just to be safe.

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Shawna

6 months ago

I agree, the image might be a clue to help us solve the equation.

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Lashandra

6 months ago

I think the seasonal factor is used to adjust the forecast for year 2016.

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Darrin

7 months ago

Hmm, let's see. The equation is -114.027 - 1.47x, and we're asked to forecast for 2016. Assuming an additive model, the forecast should be the value given by the equation for x = 2016, which is -113,868. That's option B.

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Lorean

7 months ago

I agree with Gary, the rationale behind it makes sense

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Gary

7 months ago

I think the answer is A) -113968

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Carin

7 months ago

The equation represents a linear trend in the trade balance, so the forecast should be a linear function of time. The seasonal factor of 82.6 seems irrelevant to the question, which is asking for a forecast without considering seasonality.

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