Practice Exam #1

Matrix organizational structure is

A combination of two other organizational structures

Supervised by the Federal Reserve Board, The DAB Company provides investment advisory services, insurance underwriting, securities underwriting, and merchant banking services. What does the DAB Company exemplify?

A financial holding company

An economy with a high unemployment level tends to have (...)

A lower level of inflation

Which of the following people would make the best entrepreneur?

A risk taker with a strong work ethic

What is an important aspect of a customer-centric business?

Aligning business activities with customer needs

What type of financial statement includes an accounting of the shareholders' equity for a company?

Balance sheet

What is one of the benefits to a business of reinforcing service orientation through communication?

Builds positive relationships with customers

What is the first step Cameron should take to protect himself from identity theft after he loses his wallet?

Cancel all of his credit and debit cards

One advantage to businesses of using electronic funds transfer technology to collect accounts receivable is that it eliminates (...)

Check processing

Beverly, the new office manager, just completed a review of the last two years of accounts receivable data. In doing so, she discovered that there are erroneous duplicate entries totaling $25,628 in the system. Unfortunately, due to these duplicate entries, collection letters were sent to many customers who had already paid in full—customers who are angry with the company for sending them the letters. What should Beverly do to try to save these customer relationships and ensure that these customers are not bothered in the future?

Complete a data cleansing of the erroneous entries

The process or activity of using goods is called (...)

Consumption

Which best describes the taxation of both IRAs?

Contributions are taxed, but withdraws during retirement are not

If Hannah wants to invest in the capital markets, what types of securities should she purchase?

Corporate bonds and preferred stock

Identify the type of appeal used in the following persuasive message: "This new book is written by Dr. Juliet Browne, who holds a doctorate from the Harvard School of Medicine and is the Chair of the World Health Organization."

Credibility

Which are the following are examples of deposit-taking financial institutions?

Credit unions, savings and loan associations, and commercial banks

Barry's family is originally from Ireland. Their customs, habits, and traditions are known as their (...)

Culture

Insecure people are often afraid to become assertive because they think they will (...)

Damage their relationships

What do some investors use to hedge the risk of investing in the foreign exchange market?

Derivatives

While conducting a staff meeting, the speaker noticed that Colin was texting on his smartphone. Colin's nonverbal behavior indicates that he was (...)

Distracted

One way that individuals exhibit self-confidence is by being (...)

Enthusiastic

One way a leader can encourage others to work toward a shared vision is by (...)

Explaining how they will benefit

At work, Bob is assigned to be on a team of five people that will create a new product. Which action can Bob take to participate in the team in a useful way?

Find out what other people in the group know about the project

Jon decided to promote Bill instead of Maggie to regional manager because he thinks that women aren't assertive enough in business situations. Jon is stereotyping on the basis of (...)

Gender

What is a type of informal communication that coworkers often use to communicate with each other?

Grapevine

According to most analysts, the three economic indicators that stock market investors and traders should pay the closest attention to are (...)

Gross Domestic Product, unemployment, and inflation

The key factors involved in compounding growth are the amount of money you invest, how much your investment grows each year, and (...)

How long your money is invested

When filling a tort against a business, the plaintiff must establish that the defendant (...)

Is breached by the duty of care

Maureen becomes angry and defensive whenever her supervisor asks Maureen to correct mistakes. Maureen's attitude is not a good response to criticism because (...)

It prevents Maureen from hearing the criticism clearly

Which of the following is an example of an employee respecting the privacy of a coworker?

Leaving the room when a salesperson takes a telephone call

The general economic growth of a country is supported by its (...)

Level of productivity

Coaching is mostly about (...)

Listening

Determining what consumers want in order to promote and sell those goods and services is a function of the business activity of (...)

Marketing

Example of a voluntary debtor-creditor relationship

Obtaining a loan from a bank

Alma is preparing a presentation about her department's budget to make to the company president. She wants to use a visual representation of the budget that shows parts in relation to the whole. Alma should consider using a (...)

Pie chart

The most common headings on a stock table include the 52-week high and low, the stock symbol, the estimated dividend per share, the yield percentage/rate of return, the volume/sales for the day, the closing price for the day, the net change, and the (...)

Price-earnings ratio

When the U.S. federal government owes money to a contracted employee or business, the government must pay the employee or business according to the (...)

Prompt Payment Act

When Mr. Schwarz's order did not arrive at the expected time, he called Karl, the salesperson with whom he had placed his order. Karl apologized for the delay and told Mr. Schwarz that he would check into the issue. After Karl talked with the transportation company, he immediately called Mr. Schwarz to let him know where the order was and when to expect delivery. Mr. Schwarz thanked Karl for getting back with him so quickly. In this situation, Karl reinforced the company's image by (...)

Providing efficient follow-up

Chris purchased 500 shares of microcap HRR stock. Then, he posted false information about HRR on several investment websites to hype up the stock. After driving up the price of HRR stock, Chris quickly sold all of his stock in the company and earned a large profit. The price of the stock then fell, leaving HRR investors with worthless stock. What type of investment scam did Chris commit?

Pump and dump

Financial planning can be described as a way to (...)

Realize what it takes to get the things you really want

Example of a change in the relative price ratio when the original price of red apples is $0.60 per pound and the original price of green apples is $0.80 per pound.

Red apples @ $0.90 per pound; green apples @ $0.80 per pound

Compliance in the financial industry involves financial institutions operating within (...)

Regulatory guidelines

In general, governance, risk, and compliance (GRC) software system identifies and measures risk; monitors the risk-management system; routinely checks adherence to company-wide policies; and ensures compliance with (...)

Reporting requirements

Keeping the end goal in mind refers to which standard of excellence that achievement-oriented people set?

Results

When providing product information to clients, finance professionals should (...)

Simple explanations; keep the clients' point of view in mind

Before DiAnn presents her new idea to her boss, she searches the Internet and jots down two statistics that reinforce the idea. This is an example of (...)

Supporting ideas with evidence

Seeing the big picture instead of smaller, individual parts is an organizational learning concept known as (...)

Systems thinking

Collen will vote next week on the new contract that her union has negotiated with management. Union and management are in the (...) stage of the collective-bargaining process.

Tentative agreement

Businesses usually invest in (...)

Themselves

Intangible business property that is protected by the law

Trademark

What type of letter should a business include when sending copies of a contract to a vendor?

Transmittal