Question 1

As the number of stocks in a portfolio increases, unsystematic risk

Options :

A : decreases and systematic risk decreases

B : increases, and systematic risk increases

C : decreases and systematic risk does not change

D : increases, and systematic risk does not change

Answer: C

Question 2

Southwest Supplies Inc. (SSI) is considering the following two projects with cash-flows discounted at SSI's weighted average cost of capital.

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SSI can only afford to invest in one of the projects. Which statement would most likely explain why SSI would choose Project B over project A?

Options :

A : Project B results in a higher cumulative accounting income

B : Project B generates significantly more non-cash expenses

C : Project B cash-flows are relatively more certain

D : Project B cash-flows are to be received sooner

Answer: D

Question 3

Custom Ceramics produces two hand-painted items a large bowl and a large platter. Relevant information for each of these items is shown below

Options :

A : The company should produce only bowls because the contribution margin per bowl is higher.

B : The company should produce only platters because the variable cost per platter is lower

C : The company should produce only bowls because the sales price per Bowl is higher

D : The company should produce only platters because the contribution margin per painting hour is higher

Answer: D

Question 4

A management accountant overheard the company's procurement manager discussing a kickback payment for one of the company s recent projects. The procurement manager promised to pay a share to the other person II the arrangement was kept confidential According to the IMA Statement of Ethical Professional Practice which one of the following is the most appropriate action for the management accountant to take?

Options :

A : Take no action since the incident is not related to the accounting department

B : Report the information directly to a nigh-level company executive since it is a serious matter

C : Call the company-s ethics helpline and report the matter anonymously

D : Discuss the incident with his or her own attorney and consider disassociating from the company

Answer: B

Question 5

A co league claims that morality is usually perceived and interpreted differently by different people so there is no method to judge whether one decision is better than another. This is commonly referred to as

Options :

A : ethical relativity

B : moral philosophy

C : comparative ethics

D : moral relativism

Answer: D