MSc Degrees in Financial Economics

and General Management

at the Faculty of Economics

A.Y. 2010/2011

DO NOT REMOVE
THE PLASTIC COVER
UNTIL YOU ARE GIVEN
THE SIGNAL
Page 2 Instructions – E1
INSTRUCTIONS
You are advised to read these instructions very carefully. They are essential for the correct performance of the test. The time
given includes the time for reading the instructions and performing the test.
The test is made up of 60 questions: the first 20 are designed to test aptitude while the remaining 40 are cultural ques-
tions. For each question there are three or four possible answers, of which you must choose one only which you consider
to be correct.
This booklet contains the questions. You must mark your answers on the answer sheet which was given to you with
the booklet.
Mark your answers by blacking out ( ) the corresponding box on the answer sheet. Warning: you must not mark the
answers on this booklet, but on the answer sheet provided.
On the answer sheet, you must only black out ( ) the boxes corresponding to your chosen answers; do not make any
other marks on the sheet.
To make sure that you compile the answer sheet correctly, carefully read the instructions on the sheet itself.
The pages of this booklet are numbered from 2 to 17: before you start, verify that they are all there and there are no
defects in the printing. If you observe any defects, please call them immediately to the attention of the assistants, who
will take care to replace the booklet.
Always check that the number of the question in the booklet corresponds to that where you insert your answer on
the answer sheet. Points will be awarded as follows: 1 point for each correct answer, 0 points for each incorrect, missed or
multiple answers.
Below is a series of examples of the type of questions you will find in the booklet, with explanations of how to reply.
Read these explanations carefully. The test proper starts on page 5.

EXAMPLES
Example A features a bar chart showing the number of men and women who work in the three foreign branches of
Vullo S.p.A.

40
Men
Women

30
Number of persons

25 25

20
18
15

10 9
8

Paris London Berlin

A. What is the percentage of men working in the foreign branches of Vullo S.p.A.?

51% 1

49% 2

19% 3

33% 4

To find the percentage of men that work in the foreign branches of Vullo S.p.A. you need to calculate how many peo-
ple in all work in the company (25 + 15 + 18 + 9 + 8 + 25 = 100) and then calculate how many of these people are men
(25 + 18 + 8 = 51), at this point, with these data, you can calculate the percentage (51/100), which proves to be 51%. The
correct answer is therefore number 1. To give the correct answer you must black out box no. 1 on the answer sheet.
Instructions – E1 Page 3

Now read the text below:

Clues of equally rapid changes can be seen in the economic sphere as well. One of these changes is connected to corpo-
rate restructurings, which once took place in the medium run and now have become frequent in order to compete on
international markets.

B. From reading the text, we learn that:

small businesses in Italy have no restructuring problems 1

international competition is a factor which has caused companies to restructure

more frequently than in the past 2

our products are competitive, especially abroad 3

our country’s economy is still based on small and medium-sized enterprises 4

In example B the correct answer emerging from the reading of the passage is that indicated by number 2. To give the
correct answer, therefore, you must black out box no. 2 on the answer sheet.

Example C shows two sets of four figures marked with the letters X and Y, and five figures, A, B, C, D and E. The fig-
ures of set X have been grouped together because they have a common feature which is different from that shared by the
figures of set Y. To reply to the questions, you therefore have to understand what this difference is and identify which set
the five figures below belong to: to set X, to set Y or to neither of the two.

Observe the following example:

X Y

A B C D E

C. On the basis of the figures above, which statement is true?

A belongs to set X 1

C belongs to set Y 2

A and B belong to the same set 3

B belongs to set Y 4

In the example, the difference between the two sets is given by the number of elements in the figures that compose
them. Effectively set X is made up of figures which all contain two elements, while the figures of set Y all contain three
elements. Figures A and E, therefore, do not belong to any set because they have respectively only one element and four
elements; figure B belongs to set X because it has two elements; figures C and D belong to set Y because they each have
three elements. The only statement that is true among the four proposed is number 2. To give the correct answer, there-
fore, you must black out box no. 2 on the answer sheet.
Page 4 Instructions – E1

In example D you are given data and statements. You have to find which is the correct option among the four pro-
posed.

DATA STATEMENTS

John is a good tennis player A. John’s best friend is a tennis player

George doesn’t know how to play tennis
John’s best friend went to the tennis
players’ meeting
All those attending the tennis players’ meeting
are tennis players
B. George is at the tennis players’ meeting
C. John is at the tennis players’ meeting
D. George is John’s best friend

D. On the basis of the data above, which statements are true?

Both A and B 1

Only C 2

Only A 3

Both C and D 4

The correct answer is number 3 because, given that all those present at the meeting are tennis players, if John’s best
friend went, then he must be a tennis player. To give the correct answer, therefore, you must black out box no. 3 on the
answer sheet.

An example of cultural questions found in the test is found below. Read the question carefully and choose what you
consider to be the correct answer from the four options given.

Read the question carefully:

E. What is the basis of the accounting system adopted in Italy?

Capital-based system 1

Income-based system 2

Mixed capital-income system 3

None of the three above answers is correct 4

The correct answer is number 2. To give the correct answer, therefore, you must black out box no. 2 on the answer
sheet.

In the booklet you will find questions similar to the examples illustrated above. Read each question carefully, and
mark your answer on the answer sheet. If a question seems too difficult, pass on to the next, but try to answer questions
of all types, preferably in the order in which they appear. Do not ask for further information, which cannot be provided.

REMEMBER:

• do not mark the answers on this booklet

• mark your answers on the answer sheet by blacking out ( ) the box corresponding to the chosen answer
• any other marks made will invalidate the test
• reply to questions of all types.

Now begin and good luck!

Test – E1 Page 5

TEST STARTS HERE

Read the passage below, and use the information

to answer questions no. 1 to no. 4.

The Italian economy is re-starting after a 15-month-long steady fall. According to the preliminary estimates of Istat
[the Italian National Statistical Institute], in the third quarter of 2009 the GDP increased by 0.6% from the previous
three-month term. It is the first sign of a conjunctural growth after five negative quarters. On the contrary, the GDP
decreased by 4.6% in comparison to the same period last year. As explained by the statistical institute, the conjunc-
tural growth is the result of an increased value added from industry and the service sector and a decrease in the value
added from agriculture. The third quarter of 2009 had 4 working days more than the previous three-month term and
one working day more than the same period last year.

Reply to the questions by blacking out on the answer sheet the box:

1 TRUE: means that the statement is included in the passage, or that it is implicit, or that it can be logically dedu-
ced from one or more statements present in the passage;

2 FALSE: means that the statement contradicts a statement that is included or implicit or is a logical consequence
of what is stated in the passage;

3 CANNOT BE DEDUCED FROM THE TEXT: means there is not sufficient information in the passage to draw cer-
tain conclusions as regards the truth or falsity of the statement.

1. The highest growth in the GDP for the last two years was recorded in the third quarter of 2009.

TRUE 1

FALSE 2

CANNOT BE DEDUCED FROM THE TEXT 3

2. Industry and the service sector play an exclusive role in coming out of the economic crisis.

TRUE 1

FALSE 2

CANNOT BE DEDUCED FROM THE TEXT 3

3. GDP grows proportionate to the conjunctural growth.

TRUE 1

FALSE 2

CANNOT BE DEDUCED FROM THE TEXT 3

4. In the third quarter of 2009 there were more working days than in 2008.

TRUE 1

FALSE 2

CANNOT BE DEDUCED FROM THE TEXT 3

Page 6 Test – E1

Reply to questions no. 5 and no. 6

referring to the following chart.

The following bar chart shows the number of men and women who work in the three departments in the French
branch of Merling S.p.A. Please refer to it and answer the following questions.

40
Key
36
Men

Women
30
Number of person

20

12
10 9 9
8
6

Production Sales and Finance and

distribution accounting

5. Which is the percentage of women working in the French branch of Merling S.p.A.?

50% 1

30% 2

26.5% 3

37.5% 4

6. Which is the percentage of female managers?

37% 1

40% 2

60% 3

It is impossible to establish based on the information provided only 4

Test – E1 Page 7

Consider the following figures

when answering questions no. 7 to no. 9.

X Y

A B C D E

7. On the basis of the above figures, which statement is true?

A belongs to set X 1

B belongs to set X 2

A and B belong to the same set 3

A belongs to set Y 4

8. On the basis of the above figures, which statement is true?

C belongs to set X 1

D belongs to set Y 2

C and D belong to the same set 3

D belongs to set X 4

9. On the basis of the above figures, which statement is true?

E belongs to set Y 1

B and D do not belong to the same set 2

A and E belong to the same set 3

A and C belong to the same set 4

Page 8 Test – E1

Reply to questions no. 10 and no. 11 referring to the information

provided in the following table.

The following table shows the production over the last two years in different countries and for the four most
important sectors of Merling S.p.A. Please refer to it and answer the following questions.

Production
sector United Kingdom France Norway Germany Total

Belts 7 10 8 13 38
Handbags 16 11 12 8 47
Wallets 9 12 5 15 41
Key-rings 5 7 19 6 37
Total 37 40 44 42 163
* All figures are expressed in thousands of pieces.

10. In which country is the handbags sector most productive?

Norway 1

France 2

Germany 3

United Kingdom 4

11. In which country does the production of wallets have the highest percentage in comparison with the total pro-
duction?

France 1

United Kingdom 2

Norway 3

Germany 4

Read the following data and statements carefully, then reply to questions no. 12 and no. 13.

DATA STATEMENTS

Valeria is older than Sandra A. Sandra is younger than Luisa

Giorgia is older than Luisa B. Valeria is older than Giorgia
Sandra is younger than Marta C. Marta is older than Valeria
Marta is younger than Luisa D. Marta is younger than Sandra

12. On the basis of the above data, which statements are true?

Both A and B 1

Only C 2

Only A 3

Only D 4
Test – E1 Page 9

13. On the basis of the above data, which statements are false?

Both B and A 1

Both D and B 2

Only D 3

Only C 4

Reply to questions no. 14 and no. 15 referring to the information

provided in the following text.

The Sales Manager is to go to Canada to negotiate a sales agreement for belts and handbags. The total price for their
production and delivery to Canada is 20.00 € and 22.00 € respectively. The exchange rate is 4.30 Canadian dollars per
Euro when the bank sells the Canadian dollars and 4.50 Canadian dollars per Euro when the bank buys them.

(The profit margin is calculated as a percentage of the costs of production and delivery.)

14. Merling S.p.A. wishes to get a profit of 30%. How much should it sell every handbag?

€ 26.00 1

€ 28.00 2

€ 28.60 3

€ 66.60 4

15. Merling S.p.A. aims at fixing the price at 30.00 € per belt. How much should it ask in Canadian dollars?

12.90 Canadian dollars 1

13.50 Canadian dollars 2

129.00 Canadian dollars 3

135.00 Canadian dollars 4

Page 10 Test – E1

Read the passage below, and use the information

to answer questions no. 16 to no. 20.

Research and innovation «are the only means to keep having a strong, competitive manufacturing system». The
President of Confindustria underlines that Italy cannot compete with China and Eastern European countries on costs,
however, it can successfully compete in the world by relying on products with a high-level added value and techno-
logical innovation. The president of Confindustria strictly links production with innovation, research and training:
«That is what makes the “made in Italy”: if we wish to keep the strength of our enterprises, we ought to invest in
research. We oppose the cuts and firmly ask that also the issue of research tax credit, which is currently capped, be
reviewed». In Italy, 67% of the graduates are unaware that Italy is the second manufacturing country in Europe after
Germany (and the sector is worth 60 billion Euros), and that, without vocational schools, much of the “made in Italy”
business would not exist. This is why «vocational training must return to act as the backbone of the country’s indus-
trial growth». On the contrary, when firms are seeking technical workers they are not always able to find them.

16. The solution of the Confindustria to keep the Italian manufacturing system competitive in the world is:

trying reducing the costs 1

increasing funding to enterprises 2

favouring talks with China and the Eastern European countries 3

investing in research 4

17. Research tax credit currently has a cap which:

facilitates innovation 1

gives a reason to choose a vocational school 2

needs changing 3

has an influence on the quality of products 4

18. Young people should be encouraged to choose vocational schools:

because that is what the world market needs 1

because vocational training is the foundation of much of the “made in Italy“ 2

because the technological sector needs re-launching 3

to solve an unemployment issue 4

19. According to the president of Confindustria, production, innovation, research and training:
form the cornerstones of the enterprise in our country 1

are distinctive features of the German economic system 2

are the first sectors to suffer from cuts in a period of crisis 3

are often neglected 4

20. Relying on products with a high-value level added and technological innovation:
is a way-out of the economic crisis 1

is the only means for Italy to compete on the side of costs 2

is needed to follow the market changes 3

is a turnabout in our current economy 4

Test – E1 Page 11

21. Which of the following vitiating factors renders a contract void?

Duress 1

Mistake at calculation 2

Illegal purpose 3

Misrepresentation 4

22. If a company’s fixed costs amount to 2,000, its average variable cost is 2 and the price for one unit is 6, the break-
even point will be at:
300 1

400 2

500 3

600 4

23. The slope of the demand curve:

is directly proportionate to the price elasticity 1

is indirectly proportionate to the price elasticity 2

depends on the purchasing power 3

depends on the demand function 4

24. What is the median of a random variable?

the weighted geometric mean of the possible values for that random variable 1

the value which maximize the density of probability 2

the value for which the probability of the random variable being higher or lower than
the median itself is the same 3

the value for which the probability of the random variable being the same as the median itself is 1/2 4

25. Art. 1 of the Constitution of the Italian Republic states that Italy is a democratic republic based:
on family 1

on the law 2

on labour 3

on the principle of social solidarity 4

26. The start-up costs are:

an active component of the capital 1

a passive component of the capital 2

a negative component of the operating profit 3

a positive component of the operating profit 4

Page 12 Test – E1

27. The best basket is given:

at the meeting point of the demand and supply curves 1

when the consumer’s and the producers’ surplus are the same 2

at the point where the budget constraint and the indifference curve are tangent 3

none of the above statements is correct 4

28. If X and Y are two random, continuous and independent variables which can get all values between 0 and 1
(including the two extremes) and have a constant distribution on the interval [0,1], what can you state about
the distribution of the random variable Z = X + Y?
Z has a constant distribution in the interval [0,1] 1

Z has a constant distribution in the interval [0,2] 2

Z can get all real values and has a Gaussian distribution 3

Nothing can be certainly stated about the distribution of Z 4

29. Which of the following can be classified as “people company” (“società di persone”)?
Stock limited company (Società in accomandita per azioni) 1

Limited liability company (Società a responsabilità limitata) 2

General partnership (Società in nome collettivo) 3

Joint-stock company (Società per azioni) 4

30. When drawing up the annual report, abiding by the prudence rule means:
not registering a profit until it has been cashed 1

considering losses, albeit only assumed, and not registering a profit until it is assured 2

being careful when applying international accounting standards which might clash with some
provisions of the Civil Code 3

underestimating the company’s liabilities in order not to deprive the company’s financial integrity 4

31. In the labour market, by the income effect, an increase in the wage makes the supply of labour:
increase as working time becomes more convenient 1

increase as free time becomes more expensive 2

decrease because it is possible to keep the same utility with fewer working hours 3

decrease as free time becomes less expensive 4

32. A saver deposits 50,000 € in a bank that offers an interest rate of 1% a year, and capitalization every year. How
much is the future value after 3 years?
50,300 € 1

50,987.54 € 2

51,500 € 3

51,515.05 € 4
Test – E1 Page 13

33. The title to a real property can be acquired by acquisitive prescription (usucapione):
by continuously holding the property for twenty years 1

by continuously or non-continuously holding the property for twenty years 2

by continuously holding the property for fifteen years 3

by continuously holding the property without intention for five years, provided that good
faith is demonstrated 4

34. What do the Notes to the Financial statement clarify?

Formal issues about the Financial statement only 1

Substantial issues about the Financial statement only 2

Both formal and substantial issues about the Financial statement 3

The content of the memorandum accounts only 4

35. A monopolist maximizes the profit:

by increasing the marginal cost of the latest produced item with regard to the marginal profit 1

by making the marginal cost of the latest produced item the same as the marginal profit 2

when their demand curve matches the demand curve of the market 3

by implementing a price-taking policy on the consumer 4

36. A customer initially deposits 100,000 € in a bank and its future value after 5 years is 102,500 €. Knowing that
the bank offers a simple interest, how much is the rate?
0.005% a year 1

0.05% a year 2

0.5% a year 3

5% a year 4

37. A “draft” is:

a bank cheque 1

a cashier’s cheque 2

a bill of exchange 3

a bank receipt 4

38. Company Alfa leased an industrial building in September and agreed on paying in advance with instalments
every six months. On 01/09 they paid the instalment for the months September-February and the total amount
was 600. When adjusting the journal entries, it will be necessary to enter:
positive accruals for 400 1

positive deferrals for 400 2

positive deferrals for 200 3

positive accruals for 200 4

Page 14 Test – E1

39. In a closed economy the GDP is made of:

Investments + Total production + Consumption 1

Investments + Public expenditure + Consumption 2

Investments + Public expenditure + Consumption + Export – Import 3

None of the above statements is correct 4

40. Consider the actualisation function Va = Cf (1 – st); Va represents the actual value, Cf is the callable capital at the
future time t and s is a parameter (the single discount rate). When Cf = 100,000 € and t = 20 years, Va = 50,000 €,
how much is s?
0.02 year–¹ 1

0.025 year–¹ 2

0.04 year–¹ 3

0.05 year–¹ 4

41. Which of the following may allow for the dissolution of an informal partnership under sec. 2272 of the [Italian]
Civil Code?
An agreement between all partners 1

An agreement between the managing partners 2

An agreement between most managing partners 3

When a partner with power of representation ceases to trade 4

42. Costs for raw materials, supplies and consumables recorded at section B.6) include:
only the expenses for acquiring materials to be used in the production function of the company 1

the variation of left-overs for raw materials, supplies, consumables and goods 2

only the expenses for acquiring materials to be used in the production function of the company
except the materials used for economical buildings 3

all expenses for acquiring materials used in various company departments (production,
marketing, accountancy) 4

43. The IS schedule:

represents the equilibriums of interest rates and real output in the goods and services market 1

represents the equilibriums of interest rates and real output in the financial market 2

is a downward sloping curve because increasing the interest rates makes the production increase 3

is a downward sloping curve because, given the real money supply, increasing the production
makes the interest rate increase 4

44. A restaurant has a special offer for regular customers: during the week, the fixed price for the first lunch is p, the
second lunch costs half of p, the third is a quarter of p, the fourth is an eighth of p, and so halving the price
every time. In a week, a customer has 5 lunches at the restaurant and spends 31 € in total. Which is the price
for the first lunch?
6.2 € 1

8€ 2

16 € 3

Cannot be determined basing on the information provided only 4

Test – E1 Page 15

45. The power to dissolve the Parliament (in Italy) belongs to:
the Prime Minister 1

the President of the Republic 2

the President of the Constitutional Court 3

the Minister of Justice (Guardasigilli) 4

46. The purchased goodwill of a company:

is a tangible fixed asset 1

is a financial fixed asset 2

may be entered in the balance sheet only if it is purchased in return for payments 3

may be entered in the balance sheet only if the latter abides by the liquidation principle 4

47. The Phillips curve shows:

a direct relation between the rate of unemployment and the rate of inflation 1

an inverse relation between the rate of unemployment and the rate of inflation 2

that the rate of inflation influences the variation of the rate of unemployment 3

none of the above statements is correct 4

48. Let f(x) and g(x) be two real functions, continuous in the interval (a,b), with a real variable. Which of the fol-
lowing functions is not necessarily continuous for the whole of the interval (a,b)?
f(x) + g(x) 1

f(x) – g(x) 2

f(x) · g(x) 3

f(x) 4
g(x)

49. A trustee in bankruptcy (or receiver) is appointed:

during the bankruptcy proceeding 1

by the declaration of bankruptcy 2

when a bankruptcy petition is lodged 3

when the bankrupt’s assets are distributed to the creditors 4

50. The partial results in the reclassification of the Income Statement are useful to:
understand how much the single areas of the company management affected the final
results during the accounting period 1

calculate taxes more precisely 2

compare it with the values of a financial model 3

separate expenses from profits 4

Page 16 Test – E1

51. In 1992, Bill Clinton and Alan Greenspan – then the FED chairman – aimed at reducing the budget deficit.
Which of the following combination of financial and monetary policy did they enforce?
Monetary and financial growth 1

Monetary growth and tax burden 2

Monetary burden and tax growth 3

Monetary and tax burden 4

52. Which of the following real functions with a real variable does definitely not exist?
A continuous function, derivable in its domain 1

A function never continuous in no points of its domain 2

A function always continuous in its domain, which is however never derivable 3

A function always derivable in its domain, which is however never continuous 4

53. Which of the following involves an agency?

A rental agreement 1

A brokerage agreement 2

A commissionaire arrangement 3

A storage agreement 4

54. The EBIT measure is:

independent from the choice of the financial structure 1

influenced by the administrative expenses 2

influenced by the fiscal interferences 3

influenced by the extraordinary management of the firm 4

55. In a fixed exchange rate regime, the adjustment of the real exchange rate is given by constant variations of:
the exchange rate matched to the value of another single currency 1

the domestic price-levels matched to the fixed domestic price-levels 2

the domestic price-levels matched to the foreign price-levels 3

none of the above statements is correct 4

56. Knowing that g, a company’s annual profit, depends on two real and not negative parameters x and y as to the
relation:
g(x,y) = 45 – x2 – y2 + 4x + 2y.
Which are the values of x and y that maximize the profit?
x=y=0 1

x = 1; y = 0 2

x = 2; y = 1 3

There is no absolute maximum point in the quadrant x ≥ 0, y ≥ 0 4

Test – E1 Page 17

57. The storage agreement as regulated under sec. 1834 of the [Italian] Civil Code is:
a banking transaction at debit 1

a banking transaction at credit 2

a unilateral banking transaction 3

not a banking transaction 4

58. The Gross Operating Margin:

shows the profit yielded by the financial management 1

is not influenced by budget policies 2

shows the cash flow in the structural operational management 3

shows the profit yielded by the additional management 4

59. In a given market, the demand curve is p = 500 – 4q and the supply curve is p = 100 + 4q. When is the market
in equilibrium?
600 p ; 50 q 1

50 p ; 200 q 2

100 p ; 100 q 3

300 p ; 50 q 4

2x+1
60. Consider the function f(x, y) =
(y2+1)(x2+1)
whose constraint is 0 ≤ x ≤ 1, 0 ≤ y ≤ 2. Which are the max and
min values of the function as x and y vary within the feasible set?
1+ 5 1
Max is , min is 1
2 5

1– 5
Max is , min is 0 2
2
1 1
Max is , min is 3
2 5

1+ 5
Max is , min is 0 4
2

END OF THE TEST

© 2009, Giunti O.S.
 LUISS GUIDO CARLI

Corsi di Laurea Magistrale in Economia A.A. 2010/2011

Griglia risposte esatte

Risposta Risposta Risposta

esatta esatta esatta
Domanda 1 3 Domanda 21 3 Domanda 41 1
Domanda 2 2 Domanda 22 3 Domanda 42 4
Domanda 3 3 Domanda 23 1 Domanda 43 1
Domanda 4 1 Domanda 24 3 Domanda 44 3
Domanda 5 4 Domanda 25 3 Domanda 45 2
Domanda 6 4 Domanda 26 1 Domanda 46 3
Domanda 7 1 Domanda 27 3 Domanda 47 2
Domanda 8 2 Domanda 28 2 Domanda 48 4
Domanda 9 3 Domanda 29 3 Domanda 49 2
Domanda 10 4 Domanda 30 2 Domanda 50 1
Domanda 11 4 Domanda 31 3 Domanda 51 2
Domanda 12 3 Domanda 32 4 Domanda 52 4
Domanda 13 3 Domanda 33 1 Domanda 53 3
Domanda 14 3 Domanda 34 3 Domanda 54 1
Domanda 15 4 Domanda 35 2 Domanda 55 3
Domanda 16 4 Domanda 36 3 Domanda 56 3
Domanda 17 3 Domanda 37 3 Domanda 57 1
Domanda 18 2 Domanda 38 3 Domanda 58 2
Domanda 19 1 Domanda 39 2 Domanda 59 4
Domanda 20 3 Domanda 40 2 Domanda 60 1