a) required an explanation of the appropriateness to Nehby of diversifying risk by going into the hotel business. Many candidates explained the specific risks Nehby might face in the hotel business, making no reference to diversification which is specific in the requirement.

This requirement was looking for ways in which the hotel was sufficiently different as a business model and in where it was located to allow the specific risk inherent in the existing restaurant business to be reduced by taking this option. Many candidates instead created new information, for example, suggesting the hotel might face the risk of fire.

This highlights the need for candidates to take great care when reading the requirement and to consider the professional skills marks, which will also give an indication of what candidates should be considering when preparing and writing an answer. Scepticism requires candidates to probe, question and challenge information presented to them.

However, some candidates who did discuss diversification only said that diversification by investing in the hotel would be good for Nehby without challenging it at all.  This point would gain a technical mark if justified, but does not contribute to scepticism as there is no questioning of the fact that part of the hotel’s income would be from the existing business, namely restaurant sales. Candidates who answered in context and explored diversification sceptically were well rewarded.