Question 1

PZI plc is exploring for oil in an area previously believed to have substantial, but difficult to extract reserves. Recent advances in hydraulic fracturing technologies ('fracking') mean that, as long as oil prices remain above certain levels, it may now be economical to move towards extraction.Initial financial analysis indicates that PZI's investment in the technologies is likely to produce a negative NPV, unless shale gas is also discovered and can be extracted.

Which of the following techniques will allow PZI plc to factor in the financial impact of any potential shale gas reserves?

Options :

A : Real options

B : Scenario planning

C : Delphi technique

D : Regression analysis

Answer: A

Question 2

According to Porter, there are three generic strategies through which an organisation can gain competitive advantage. What are the three generic strategies?

Options :

A : Cost leadership, Differentiation, Focus

B : Market Penetration, Diversification, Product Development

C : Internal development, Strategic alliances, Takeovers and mergers

D : Corporate, Business, Operational

Answer: A

Question 3

A global shipping company applied an advanced information technology system to all its operations to ensure timely delivery. The proprietary information technology system is an example of

Options :

A : market position.

B : core competency.

C : vertical integration.

D : operating leverage.

Answer: B

Question 4

Risk from volatility in foreign currencies, interest rates, and commodities is an example of what risk?

Options :

A : Strategic.

B : Financial.

C : Hazard.

D : Operational.

Answer: B

Question 5

According to Michael E. Porter's generic strategies model, a firm that successfully adopts a differentiation strategy is most likely to

Options :

A : Be able to pass supplier cost increases on to its customers.

B : Risk overlooking product changes.

C : Tend to disregard cost control.

D : Closely supervise its labor force.

Answer: A