American University in Bosnia and Herzegovina

American School of Economics ENTRANCE EXAM

Name: Ahmed Sayed Moustafa
Date: 20th of June 2013

Tips and Rules

- Please make sure that you read the question carefully before you start answering
- Make sure you show your work, if you circle the correct answer but dont show how you arrived to
that answer, you will NOT get any points
- Make sure you write your name on the test
- If the question is asking to write, for example, 5-6 sentences, then please make sure that you do
exactly as asked
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1. Compare the knowledge of persons Peter, Jenny, Robert, Layla, Maya and Nenah in relation to
each other :
(i) Peter knows more than Layla
(ii) Jenny knows as much as Maya
(iii) Robert knows less than Nenah
(iv) Leyla knows more than Jenny
Most knowledgeable person amongst all is : (pts 7)
a. Peter
b. Jenny
c. Layla
d. Nenah
e. Maya
Peter> Layla
Jenny= Maya
Robert < Nenah
Layla > jenny therefore Peter > layla > jenny and maya
2. BMCSDFICUT AOCDPBACLPCAMFIUTOL
In the given sequence, which letter is repeated for the most number of times ? (pts 6)
a.

C (Repeated 5 times)

b.
c.
d.
e.

E
P
S
A

3. Jack starts from his office and walks 3 km towards North. Then he turns right and walks 2 km;
again he turns right and walks 5 km. Then again he turns right and walks 2 km. At what distance is
he from the starting point? (pts 6)
a.
b.
c.
d.
e.

5km
8km
2km (5 km -3km = 2km)
From his office
Insufficient data

4.
How many such 5's are there in the following number sequence which are either
immediately preceded by 7 or immediately followed by 2? (pts 6)
5735375167524 5257243152 758
a.
b.
c.
d.
e.

one
two
three
four
more than four

5.. 'Tongue' is related to 'Taste' in the same way as 'Ear' is related to (pts 6)
a.
b.
c.
d.
e.

dumb
deaf
hear
speak
smell

6.. Lets say that you want to open the bakery store in downtown Sarajevo. What marketing
techniques would you implement to promote your business (please write at least 5-6 sentences)
(pts 6)
Answer: Marketing techniques used to promote small businesses (assuming a bakery store is a
small business):1. Flyers are very good for affordable advertising; it can be done in areas around
the store or in mail. 2. Value addition, to increase customer satisfaction. An example is to make free
baked goods for every 3, % discounts and or loyalty programs. 3. Using social networks such as
Facebook and twitter to reach more customers and make announcements easily. 4. Using Posters, in
nearby coffee shops and supermarkets to promote and increase customer awareness of the store.

7.. The wages earned by Robin is 30% more than that earned by Erica. The wages earned by
Charles is 60% more than that earned by Erica. How much % is the wages earned by Charles more
than that earned by Robin? - make sure you show your WORK (pts 7)
Wage (robin) [X] = 1.3* (Wage, Erica) [Y] forms an equation=> X=1.3Y
Wage (Charles) [Z] = 1.6 * (wage, Erica) [Y] forms an equation => Z= 1.6Y
By solving the two equations simultaneously:
Y= X/ 1.3 and Y= Z/1.6
Therefore X/1.3= Z/1.6
Hence Z/X= (1.6/1.3)= 1.2307 therefore Charles earned 23.07 % more than Robin.

8.. A prospect is: (pts 7)

prospect ( likelihood of something happening) customer

a) any customer who walks into the bank

b) an employee of the bank
c) a customer who is likely to be interested in bank's product or service
d) a depositor of the bank'
e) a borrower of the bank

9.. Lets say that you have owned your bakery for 3 years. How would you expand your business
even more? (5-6 sentences) (pts 6)
Expanding the business by:
Doing market research and adjusting your menus and products according to the market demands
and competitors in the same area would increase your market share and grab new customer. Try to
add more appealing products and value for your customers. Make sure to keep your customers loyal
and meet the expectations as much as you can. Opening up in good new locations can significantly
increase your market share and market presence for example, opening up beside coffee shops.
Securing a catering contract would also expand the business.

10.. Please relate to question no. 9. Do you think (and why) that it would be smart to expand your
business beyond the bakery products. Please explain in detail (7-8 sentences) (pts 6)
In my humble opinion, I believe expanding business beyond bakery products should be justified by
a well structured market survey and study. Adding different products which can be relevant to
baked goods can definitely be a plus for example coffee and tea products, sandwiches (subway
style with fresh baked bread from the bakery) and./ or pizza. A very detailed study of the market to
see how compatible is expanding the bakery is going to be with the current and future markets. If
the study shows positive results, the expansion can be carried out in one single location for a period
of time, like a promotion of some sort and study the customers feedback.

11.. Sam buys 10 apples for $1. At what price should he sell a dozen apples if he wishes to make a
profit of 25%? - make sure you show your WORK (pts 7)
Cost of 10 apples = $ 1 therfore cost of One apple = 1/10 ($ 0.1 Each)
For a 25 % for One apple = 0.1 *1.25= $ 0.125 Each
For a dozen (12 apples) therefore = $ 0.125 * 12= $ 1.5/ Dozen

12.. Lets say that you want to open your own business. How will you get the money (please
explain at least 2 ways) to start your business? (7-8 sentences) (pts 6)
A business can be financed through a couple of channels; a couple of examples are described
below:
1. Microloans from the banks, which will provide short-term start up loans. Loans can be made
through non-profit organizations in which there will be no interest rate on loan. Or can me made
through the bank, which will have an interest rate. Nowadays, Banks offers funding for small
businesses.
2. Using a credit card, to fund a small business is very risky because of the due dates of payments
and the consequences of falling behind. One can pay the minimum amount during the start up
ramping phase.
3. Add one or more partners to invest in your business, usually you have to go for some
experienced investors in same field or similar.
4. Raise funding through a social event for family and friends (you wont be able to gather all the
money, but a huge helpful chunk). This is a last resort idea.
13.. If you bought 50 shares of Apple Inc, at $550 and the shares went up in price to $571, how
much percent gain have you achieved? Please show all of your work (pts 6)
$ 550 / 50 shares = $ 11/ Share
$ 571/ 50 shares = $ 11.42 / Share
$ 0.42 increase per share 0.42/ 11 * 100 = 3.81 % Gain.

14.. If you bought shares of Apple Inc, at $550 and it went down to $500 how much (in percent)
did you lose? Also how many percent do you have to gain to go from $500 to $550. Please
SHOW all your work. (pts 6)
$ 550 / 50 shares = $ 11/ Share
$ 500/ 50 shares = $ 10 / Share
Therefore the loss is 1/11 * 100= 9.09 %

In order to gain to $ 550, it must be 10 %

(550-500) * 100 %

15. What do you think is budget ? please explain in 7-8 sentences (pts 6)
A budget is an approximate estimation of the revenue and expenses over a specified length of time
(future). A budget can vary from small budgets made for personal use or huge budges made by a
government or a multinational organization. A budget is a microeconomic concept that shows the
tradeoff made when one good is exchanged for another. The estimated budget can be over or under
run, (other terms for surplus budget or a deficit budget). A surplus budget or (under run budget) is
where the profits are anticipated. An over run budget is where expenses exceed the revenues. The
balanced budget is where revenues equal the expenses. A budget estimate will never be 100 %
accurate and adjustments to suit the new environments changes in a business is a must.

16.. Three years back, a father was 24 years older than his son. At present the father is 5 times as
old as the son. How old will the son be three years from now? - please show your WORK (pts 6)
Y (age of father 3 years back) = X (age of son) + 24
Y + 3 (present time) = 5(X+3)
Resulting equations => Y = X+ 24 and Y = 5X+ 12 solving the equations simultaneously gives us:
X =3 Y= 27 (3 years ago)
Now X+3 Y+3 therfore age now is X=6 Y=30
Age: 3 years later son= 9 years old Father = 33 years old