ACCA FM — Financial Management Practice Exam 1

Section A

NexusDAO is a decentralized autonomous organization transitioning into a formalized corporate structure to attract institutional investors. The founders are concerned about the classic 'agency problem' arising once external shareholders provide capital.

Which of the following mechanisms is MOST likely to align the interests of the new external shareholders with the executive directors of NexusDAO?

Section A

AquaVitae is a global non-governmental organization (NGO) dedicated to providing clean water infrastructure in developing nations.

Unlike a commercial tech startup, which of the following represents the PRIMARY financial objective for AquaVitae?

Section A

VoltGrid PLC, a public utility company, is evaluating the macroeconomic environment. The government has recently announced an expansionary monetary policy, including a significant reduction in the base interest rate.

What is the most likely immediate impact of this policy on VoltGrid PLC?

Section A

EcoBuild, a sustainable construction firm, needs to raise finance. The finance director is considering various instruments available in the money markets and capital markets.

Which TWO of the following are characteristics of the money markets?

Section A

CryptoFlow is a digital asset exchange that needs to manage its fiat currency reserves. It requires $2,000,000 in fiat cash steadily over the next year. The cost of converting digital assets to fiat (transaction cost) is $50 per conversion. The opportunity cost of holding fiat cash is 5% per annum.

Using the Baumol model, what is the optimum amount of fiat cash CryptoFlow should transfer in each transaction? (Round to the nearest whole number).