Read the article below about mining mergers and the questions on the opposite page. For each question(13-18), mark one letter(A, B, C or D)on your Answer Sheet. Three middling mining firms bet on scale and scarcity In May prices for copper, nickel and other metals rose to record levels, although they have since fallen a bit. Now three mining firms are proposing the most expensive merger in the industry’s history. The $40 billion deal, in which an American company, Phelps Dodge, plans to take over two Canadian ones, Inco and Falconbridge, would create the world’s biggest producer of nickel, the number two in copper, and the fifth-ranked mining firm overall. The records may not stop there: two other mining firms, Xstrata and Teck Cominco, had previously bid for Falconbridge and Inco respectively, and could make further offers. Soaring commodities prices have left mining firms flush with cash and keen to expand. One way would be to search for more metal in the ground, instead of on the stockmarket. But organic growth is expensive at the moment: as firms rush to increase their output to take advantage of high prices, every conceivable input, from engineers to mining trucks’huge tyres, is in desperately short supply. Developing new mines is also slow. Mining executives worry that projects that get the go-ahead when prices are high will not look so attractive when the next recession comes. That could be true of the proposed merger too. Phelps Dodge offered a premium of 23% over the price of Inco’s shares and 12% over Falconbridge’s. Those shares, in turn, have been rising for several years along with the firms’ wares— nickel, for the most part, at Inco, and nickel and copper at Falconbridge. The bosses of the firms insist that the mark-up is justified, for several reasons. For one thing, they reckon they can squeeze savings of $900m a year out of the combined entity by 2008, by sharing equipment and personnel among adjacent mines, for example, and pooling their marketing staff. More importantly, they argue that the size and diversity of the new company will make it less vulnerable to mining’s painful cycles, and so more attractive to investors. The biggest and most diversified mining companies, such as BHP Billiton and Rio Tinto, do boast higher share valuations. They produce everything from aluminium to zircon, and so are less susceptible to fluctuations in the price of any particular metal. By the same logic, the more mines a firm is running or developing, and the more countries it operates in, the less risk each individual project poses to profits. The merged trio will certainly have a broader geographical spread, with mines in five continents. But its main projects, in stable places like the United States, Canada and Chile, never seemed that risky in the first place. Furthermore, despite having sidelines in cobalt and molybdenum, the new firm’s fortunes will depend chiefly on the price of copper and nickel—two of most volatile metals in recent years. Some analysts mutter that Phelps Dodge embarked on the merger chiefly to save itself from being taken over. Investors seem to share their doubts: Phelps Dodge’s shares fell by 8% after it announced the deal, despite a simultaneous pledge to spend $5 billion on a share buy-back scheme once the merger is concluded. On the other hand, the price of nickel and copper jumped on the news. Traders seem to have assumed that the companies would have contemplated such an expensive deal only if they thought that metals would remain in short supply for some time. The more money that mining firms spend buying one another, rather than exploring for and developing new mines, the likelier that is.

Look at the statements below and the comments of four experts on a survey about coaching on the opposite page. Which expert’s comment(A, B, C or D)does each statement(1-7)refer to? For each statement(1-7), mark one letter(A, B, C or D)on your Answer Sheet. You will need to use some of these letters more than once. Example: 0 Most coaches believe their clients are mentally healthy. [*] The Coaching Industry: A Work in Progress There’s no question that future leaders will need constant coaching and the coaching industry badly needs someone to define the profession. Four experts give their comments on a survey about coaching industry. A Ram Charan As the survey results demonstrate, what we think of coaching today is generally a service to middle managers provided by entrepreneurs with a background in consulting, psychology or human resources. This kind of coaching became popular over the past five years because companies faced a shortage of talent and were concerned about turnover among key employees. Firms wanted to signal their commitment to developing their high-potential executives, so they hired coaches. The kind of coaches I am talking about will do more than influence behaviour: they will be an essential part of the leader’s learning process, providing knowledge, opinions and judgment in critical areas. B David B. Peterson In the survey, only 3% of coaches said they were hired primarily to address non-work issues, yet more than three-quarters of coaches report having gotten into personal territories at some time. It underscores the fact that for most executives, work and life cannot be kept entirely separate. Many of them feel some strain on their personal lives. Not surprisingly, therefore, the more coaches can tap into a leader’s motivation to improve his or her home life, the greater and more lasting the impact of the coaching is likely to be at work. C Michael Maccoby The survey shows more than half of the coaches think their clients do not become overly dependent, which is, in my view, unrealistic. Coaches have an economic incentive to ignore the problem of dependency, creating a potential conflict of interest. It’s natural for them to want to expand their business, but the best coaches, like the best therapists, put their clients’ interests first. What this means for the companies is that before they hire a coach, they should ask him how he handles dependency in relationships. D Anthony M. Grant According to the majority of coaches in our survey, coaching differs dramatically from therapy. However, the notion that candidates for coaching are mentally robust flies in the face of academic research. I’m not suggesting most executives who engage coaching have mental health disorders. But some might, and coaching those who have unrecognised mental health problems can be counterproductive and even dangerous. Firms should require that coaches have some training in mental health issues—for example, an understanding of when to refer client to professional therapists for help.

Read the article below about the importance of the division of labour. Choose the best word or phrase to fill each gap from A, B, C or D on the opposite page. For each question(19-33), mark one letter(A, B, C or D)on your Answer Sheet. There is an example at the beginning(0). The Significance of the Division of Labour The significance of the division of labour was first found by Adam Smith in the 1770s. He(0)A part of its advantages. He gives as an example the process【C1】______which pins were made in England. “One man draws【C2】______the wire: another strengthens it: a third cuts it: a fourth points it: a fifth grinds it at the top to prepare it to receive the head. To make the head【C3】______two or three operations. To put it on is a【C4】______operation, to polish the pins is another. And the important business of making pins is,【C5】______this manner,【C6】______into about eighteen operations, which in some factories are all performed by different people,【C7】______in others the same man will sometimes perform two or three of them. “ Ten men, Smith said, in this way, turned【C8】______twelve pounds of pins a day or about 4,800 pins per worker. But if all of them had worked separately and【C9】______without division of labour, none of them could have made twenty pins in a day and perhaps not even one. There can be no doubt that division of labour is a/an【C10】______way of 【C11】______work. Fewer people can make more pins. Adam Smith saw this but he also took it for granted that division of labour is in itself responsible for economic 【C12】______and development and that it【C13】______for the difference between【C14】______economies and those that【C15】______still but division of labour adds nothing new: it only enables people to produce more of what they already have. Example: A described B made C illustrated D explained [*]

Read the article below about choosing the best online advertising campaign. In most of the lines(34-45), there is one extra word. It either is grammatically incorrect or does not fit in with the meaning of the text. Some lines, however, are correct. If a line is correct, write CORRECT on your Answer Sheet. If there is an extra word in the line, write the extra word in CAPITAL LETTERS on your Answer Sheet. The exercise begins with two examples(0 and 00). [*] How to Choose the Best Online Advertising Campaign? 0 Choosing the best online advertising campaign is all about finding the right advertising for your 00 audience. Although it might seem that broad and popular in advertising is the best way to go 【M1】for any business, small and targeted to campaigns are often better online. Market research can 【M2】reveal where the first best online advertising campaign for a particular business or object 【M3】might be targeted and sometimes even how to best reach that each customer base. Making 【M4】choices based on thorough research is the best way where to conduct any advertising 【M5】campaign, online or not. Generally, a large of business will be involved not with choosing an 【M6】online advertising campaign directly, but with choosing an advertising group who 【M7】will create the campaign. Looking at past work can help in selecting an advertiser who will 【M8】effectively run into an online campaign. It is important to not only ask about past campaigns, 【M9】but also to approve of the pitch the net advertiser provides. Creating an online advertising 【M10】campaign independently is also a possibility for the small businesses. In this case, you will 【M11】primarily be choosing an overarching strategy. This may involve as online banners, tie-ins, 【M12】or viral marketing. An online campaign can utilise any tool is available online, including making websites, advertising onsocial networking sites, and posting videos.

According to the author, three mining firms

The author suggests that if the prices of the metal fall,

In the author’s opinion, the price of the firm’s metals rises because

In the fourth paragraph, the bosses believed that it is reasonable to give an increase in the price because

According to the author, why will some companies boast higher share valuations?

What problem do investors think Phelps Dodge is facing?