CIMA Exam CIMAPRO19-P03-1 Topic 3 Question 47 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 47
Topic #: 3

H manufactures and sellshealthy dietary supplements. The companyrecruits individuals as part-timeagents to sellitsproductstofriends and colleagues. These agents are required to buy H's products and to resell them at asmall mark-up.

For a fee, H will provideagents withtrainingin persuasive selling techniques. Agents who pass exams at the conclusion of this training can become distributors. Distributors buy bulk quantities of H's products at a discount and can recruit their own sales agents. Those agents can also take training and can recruit agents of their own.

At what stage does H stop being a legitimate business and become apyramidsellingfraud?

AWhen it asks its agents to buy product and marketing material up front.

BWhenit offers returns on its agents' investments that seem remarkable.

CWhen it offers its agents more reward for recruiting other agents than for selling its product.

DWhen its training programmes promise to unlock the secret of selling its product.

Show Suggested Answer

Suggested Answer: B, C

by Rhea at Mar 19, 2023, 08:39 PM

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Carin

1 months ago

You know, I heard a joke about a guy who joined a pyramid scheme and thought he was at the Louvre. He was really just in the Lourve.

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Elizabeth

8 days ago

B) When it offers returns on its agents' investments that seem remarkable.

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Stevie

11 days ago

C) When it offers its agents more reward for recruiting other agents than for selling its product.

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Raina

15 days ago

A) When it asks its agents to buy product and marketing material up front.

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Flo

1 months ago

Ah, the old 'pyramid scheme disguised as a business' trick. I bet the training programs are just glorified sales pitches. C is the way to go here.

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Octavio

1 months ago

C is the correct answer. Prioritizing recruitment over product sales is a major red flag for a pyramid scheme. H is exploiting its agents for profit, not helping them succeed.

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Glynda

1 months ago

Hmm, I'm not sure. The scenario seems like a legitimate multi-level marketing structure to me. I'll have to think this one through more carefully.

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Ria

12 days ago

C) When it offers its agents more reward for recruiting other agents than for selling its product.

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Pansy

15 days ago

B) Whenit offers returns on its agents' investments that seem remarkable.

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Viva

18 days ago

A) When it asks its agents to buy product and marketing material up front.

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Dyan

18 days ago

A) When it asks its agents to buy product and marketing material up front.

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Audry

2 months ago

This question is tricky, but I think the answer is C. Offering more reward for recruiting agents than selling the product is a classic sign of a pyramid scheme.

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Ahmad

1 days ago

True, that could indicate a pyramid scheme. What do you think about the training programmes promising to unlock selling secrets?

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Paz

2 days ago

I think it's also suspicious when they ask agents to buy product and marketing material up front.

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Karl

7 days ago

I agree, offering more reward for recruiting agents than selling the product is a red flag for a pyramid scheme.

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Diane

10 days ago

I believe it's a combination of all these factors that make it a pyramid scheme.

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Britt

11 days ago

That's true, promising remarkable returns on investments is also suspicious.

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Roosevelt

18 days ago

I think it's when they ask agents to buy product and marketing material up front.

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Demetra

1 months ago

I agree, offering more reward for recruiting agents is a red flag.

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Detra

2 months ago

I believe H crosses the line when it promises returns on investments that seem too good to be true. That's when it becomes a pyramid scheme in my opinion.

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Brunilda

3 months ago

I agree with you, Lavera. When the focus shifts to recruiting rather than selling the actual product, it's definitely a red flag.

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Lavera

3 months ago

I think H becomes a pyramid selling fraud when it offers more reward for recruiting agents than for selling the product.

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