CIMA F3 Exam With Confidence Using Practice Dumps

In response to a hostile bid, one recognised defensive tactic is to seek a “white knight” – a friendlier alternative bidder whose terms may better protect existing management and shareholders. The other options are either pre-bid structural measures or not typical primary response strategies once a hostile bid has been received.

A – “X may be able to sell the receipts forward.”

If X invoices in customers’ currencies, it will receive known foreign-currency amounts and can hedge the exchange risk using forward contracts. So this is correct.

D – “The overseas customers may have difficulty obtaining X's home currency … so the proposal may increase sales.”

Right now, customers must obtain X’s currency to pay, bearing FX costs and risk. If X invoices in their local currency, buying becomes easier and could boost sales. So D is correct.

Why the others are wrong:

B: Effective sales price might go up or down; it isn’t necessarily lower.

C: Invoicing in customers’ currency removes certainty for X in home-currency terms unless hedged.

E: That describes the current position (customers bear the risk), not the proposed change.