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CIMA Exam CIMAPRO19-P02-1 Topic 5 Question 107 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 107
Topic #: 5
[All CIMAPRO19-P02-1 Questions]

A company is investing in a huge diversification project. The plan is to develop and sell a whole new product line that they have never sold before. They've already started a massive marketing campaign for this new

product line and they are getting good feedback in their market research.

They've had to use debt funding in order to finance the project, but they hope that the returns will be worth the investment and restructuring. If they are successful they will be a step ahead of all their competitors and offer

something none of them can.

What is the risk appetite of this company?

Show Suggested Answer Hide Answer
Suggested Answer: A

Contribute your Thoughts:

Kristofer
1 months ago
This company is like a gambling addict - all in on the new product line. I hope they've got a backup plan, otherwise they're playing with fire!
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Devorah
1 months ago
A. Risk seeking, no doubt. They're going all-in on this new product line. Might as well roll the dice while they're at it!
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Bettina
4 days ago
A. Risk seeking, no doubt. They're going all-in on this new product line. Might as well roll the dice while they're at it!
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Annelle
5 days ago
B) Risk averse
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Tequila
14 days ago
A) Risk seeking
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Shaquana
1 months ago
D. Impossible to say. We don't have enough information about their overall risk profile and decision-making process to determine their risk appetite here.
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Rasheeda
11 days ago
True, we would need to know more about their overall strategy and financial situation.
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Ronny
12 days ago
I agree, without more information it's hard to determine their risk appetite.
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Elza
13 days ago
D) Impossible to say
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Lashawn
14 days ago
C) Risk neutral
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Luis
15 days ago
B) Risk averse
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Carin
25 days ago
A) Risk seeking
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Shelba
2 months ago
But what if the project fails? Wouldn't that put the company in a risky position?
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Eva
2 months ago
I agree with Leontine, the company seems to have a high risk appetite to invest in a new product line.
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Leontine
2 months ago
I think the company is risk seeking because they are taking on debt to finance a new project.
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Moira
2 months ago
I think the answer is C. Risk neutral. They're not avoiding risk, but they're also not actively seeking it. They're just trying to diversify and stay competitive.
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Nida
2 months ago
This is a classic case of a risk-seeking company. Investing in a whole new product line with debt financing definitely shows they are willing to take on high risk for potentially high returns.
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Latosha
18 days ago
I don't think they would be considered risk neutral in this situation.
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Stephane
21 days ago
C) Risk neutral
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Lizette
22 days ago
Exactly, they are willing to take big risks for the potential rewards.
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Rikki
1 months ago
A) Risk seeking
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Yolando
1 months ago
I don't think they would have taken on debt financing if they were risk averse.
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Shawna
1 months ago
B) Risk averse
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Kimbery
1 months ago
I agree, they are definitely taking on a lot of risk with this new project.
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Micheal
1 months ago
A) Risk seeking
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