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O-LevelCommerceFinanceOct/Nov 2017Paper 1 Q391 Mark

Lucy is thinking of buying some ordinary shares in CC Ltd. Which risk does she need to consider when deciding whether or not to buy these shares?

AIf CC Ltd fails, Lucy might have to sell her house to pay the company's debts.
BIf CC Ltd was taken over by another company, Lucy would receive no money for her shares.
CThe value of her shares can go down according to their price on the stock market.
DUnlike preference shares, ordinary shares do not normally pay out dividends.

✓ Correct Answer

The correct answer is C: The value of her shares can go down according to their price on the stock market.

📋 Examiner Report & Trap Analysis

Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...

🎯 Mark Scheme Breakdown

Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.

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About This O-Level Commerce Question

Topic

This multiple-choice question tests Finance in O-Level Commerce (syllabus code 7100). It is worth 1 mark.

Source

This question appeared in the Cambridge O-Level Commerce Oct/Nov 2017 examination, Paper 1 Variant 2.

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