Which of the following BEST describes two of the three primary functions of the
Federal Reserve System?
A) Developing new financial markets and aiding banks in conducting their business
B) Aiding banks in conducting business and managing the U.S. money supply and
interest rates
C) Managing the U.S. money supply and interest rates and monitoring interbank
relationships
D) Monitoring interbank relationships and acting as a bank for the federal government
E) Acting as a bank for the federal government and developing new financial markets
Which consumer influence includes perceptions, ability to learn, and attitudes?
A) Psychological
B) Personal
C) Social
D) Loyalty
E) Cultural
Why would an organization divest some of its existing business operations?
A) To focus more on its core business
B) To create new partnerships
C) Because the divested business is more valuable as a separate company
D) To buy another firm outright
E) To create a new company from several smaller ones
Whereas managers focus on plans, results, and goals, what do leaders focus on?
A) Productivity
B) Profitability
C) People
D) Sales
E) Organization
When income is taxed at the corporate level and on shareholder returns as dividends,
what is this situation known as?
A) Dual costs
B) Double taxation
C) Regulatory costs
D) Double ownership
E) Financial balancing
Which type of market research allows for an electronic history of consumers?
A) Observation
B) Primary research
C) Surveys
D) Focus groups
E) Experimentation
Which of the following terms refers to the formal recording and reporting of revenues
in financial statements?
A) Full disclosure
B) Revenue recognition
C) Compliance
D) Ethical practice
E) Materiality
Which of the following is an advantage of job specialization?
A) Workers can develop expertise in their jobs.
B) Workers will not need to be trained.
C) Jobs become more interesting.
D) Workers derive more satisfaction from their jobs.
E) Jobs do not need to be redefined.
Which selection technique is MOST likely to introduce bias?
A) Interview
B) Application forms
C) Aptitude tests
D) Drug testing
E) Polygraph tests
What is the process by which union leaders and managers negotiate common terms and
conditions of employment for the workers represented by unions?
A) Striking
B) Picketing
C) Informational gathering
D) Collective bargaining
E) Compensation planning
When there are many small firms in a specific industry, what is likely to occur?
A) Competitive advantage
B) An oligopoly
C) Private enterprise
D) Perfect competition
E) Market force reliability
When issuing shares of stock, what is being given to stock holders in exchange for their
investment in the organization?
A) Dividends
B) Voting rights
C) Increased par value
D) Tax advantages
E) Long-term growth on investments
Demonstrating a commitment to the profession by respecting and maintaining the
public trust and serving the public honorably is an example of what type of obligation?
A) Responsibilities as a professional
B) Being objective and independent
C) Maintaining technical and ethical standards through due care
D) Serving the public interest
E) Maintaining integrity
Which of the following costs refers specifically to those that change with the quantity
of a product sold or produced?
A) Annual costs
B) Variable costs
C) Fixed costs
D) Marginal costs
E) Market-adjusted costs
What is the term for the amount a firm will pay shareholders, based on the size of their
investment in the company?
A) Leverage per share
B) Earnings per share
C) Solvency return
D) Current ration return
E) Profitability ratio
What is the primary force that determines what a firm buys and sells?
A) Laws of supply and demand
B) The demand and supply schedule
C) Economic resources
D) Equilibrium price
E) The private enterprise system
Which of the following financial institutions are considered to be owned by their
depositors?
A) Commercial banks and savings and loan associations
B) Savings and loan associations and mutual savings banks
C) Mutual savings banks and credit unions
D) Credit unions and pension funds
E) Pension funds and savings institutions
When do investors expect a higher rate of return on their investments?
A) When there is greater uncertainty
B) When the investment requires more upfront capital
C) When the investment is stable
D) When there is a short time commitment
E) When the investment is for a larger share of the offering
What type of intermediary act as a storage firm allowing small operations to pick up the
goods desired?
A) Full-service merchant wholesalers
B) Drop shippers
C) Limited-function merchant wholesalers
D) Rack jobbers
E) Merchant wholesalers
Which of the following refers to the financial statement detailing a firm’s assets,
liabilities, and owners’ equity?
A) Income statement
B) Statement of cash flows
C) Balance sheet
D) Expense report
E) Annual budget
Which of the following allow(s) businesses to save time and travel expenses by
enabling employees and suppliers to communicate from any location?
A) Coordinated activities in a centralized location
B) The use of mobile offices
C) Delivery of goods from several remote locations
D) Simpler corporate structures
E) Network technology
Which of the following managers depend most on conceptual skills?
A) First-line managers
B) Top managers
C) Middle managers
D) Marketing managers
E) Financial managers
Where is the world’s largest free marketplace?
A) North America
B) South America
C) Southeast Asia
D) Europe
E) Middle East
Which of the following is a formal pledge (an IOU) obligating the issuer to pay interest
periodically and repay the principal at maturity (a preset future date) to the lender?
A) Commercial bank loan
B) Corporate bond
C) Mutual fund
D) Bond indenture
E) Prospectus
According to the Myers-Briggs framework, how do introverts recharge their energy
levels?
A) By being around others
B) When considering abstract ideas
C) When completing or finishing an assignment or project
D) By having time to process open-ended situations
E) By being alone and having solitude
What is the amount added by a retailer to an item’s purchase cost needed to make a
profit?
A) Gross
B) Variable cost
C) Breakeven
D) Mark-up
E) Fixed cost
What is the behavior that results when a decision maker makes a decision, and
continues to support that decision even when it appears to be wrong?
A) Escalation of commitment
B) Legitimate power
C) Risk propensity
D) Path-glory
E) Intuition
What is the systematic study of jobs within an organization?
A) Talent management
B) Job specification
C) Human capital systems
D) Job analysis
E) Job description
What do top executives often receive as incentives?
A) Merit salary systems
B) Workers’ compensation insurance
C) Salaries
D) Stock options
E) Wages
To avoid paying a commission on an investment, what type of fund might an investor
choose?
A) Blue-chip stock
B) Mutual funds
C) No-load funds
D) Common stock
E) Load funds
Which of the following is the amount of a product that a company can produce under
normal working conditions?
A) Capacity
B) Output
C) Efficiency
D) Burden
E) Performance