Final Exam Business 1301
When conflicts arise between the long-term interests of owners and those of other stakeholders, the fiduciary duty required of financial managers generally leads them to make decisions that are most consistent with the interests of ownership.
True
When it comes to creating customer satisfaction, perceived value is just as important as actual value.
True
Your target market is the group of people who are most likely to buy your product.
True
In the context of stock indices, which of the following is a difference between the Dow Jones Industrial Average (DJIA) and the Standard & Poor's 500 (S&P 500)?
Unlike the DJIA, the S&P 500 is a much broader index.
A bond or share of preferred stock that gives its holder the right to exchange it for a stated number of shares of common stock is referred to as a century bond.
False
A budgeted income statement is a detailed forecast of future cash flows that helps financial managers identify when their firm is likely to experience temporary shortages or surpluses of cash.
False
A budgeted income statement is a projected financial statement that forecasts the types and amounts of assets a firm will need to implement its future plans and how the firm will finance those assets.
False
A factor is a restriction lenders impose on borrowers as a condition of providing long-term debt financing.
False
A major disadvantage of primary data is that it gets frequently outdated.
False
A manufacturing firm does not necessarily need an inventory of parts and materials to assemble its products.
False
Because it is normally unsecured, commercial paper is only offered by firms with no credit ratings.
False
Benny-Duke Inc. reported a net income of $7 million but paid no dividends to its shareholders. The shareholders should sue the company for failure to provide a return on their equity investment.
False
Chromiate, a digital camera brand, decides to introduce a new MP3 player, GiZmo, under its brand name. Chromiate's decision is an example of brand extension.
False
Cognitive dissonance is the payoff for delivering value and generating satisfaction.
False
Consumer marketers direct their efforts to customers who are buying products to use either directly or indirectly to produce other products.
False
Demographic segmentation refers to dividing the market based on where consumers live.
False
Developing specific programs to help customers validate their purchase choices is one way marketers attempt to increase cognitive dissonance.
False
During the production era of marketing, the top business priority was to deliver unmatched value to customers.
False
Dynamically continuous innovations are brand-new ideas that radically change how people live.
False
Escribo Marketing holds annual blood donation camps and conducts other similar charitable events in educational institutions. Escribo Marketing is using people marketing.
False
Green marketing has created an abundance of promotional opportunities, as marketers reach out to consumers via new tools, such as interactive advertising, virtual reality displays, text messaging, and video kiosks.
False
In the context of accounting for the time value of money, discount rate remains constant in a specified number of time periods.
False
In the context of business product categories, the marketing of accessory equipment focuses on personal selling and includes more customization than installations.
False
In the context of consumer product categories, shopping products have less selective distribution than convenience products.
False
In the context of the various strategies for investing in securities, a buy-and-hold approach works only if a person makes frequent trades.
False
Institutional investors amass large pools of financial capital by accepting savings account deposits.
False
Manufacturers rarely emphasize packaging because this aspect of the product has little relevance to a customer's decision-making process.
False
Members of the general public can directly trade stocks in the over-the-counter market.
False
Leverage ratios measure the extent to which a firm uses _____.
Financial Leverage
Dora works for PowTran Corp. Her primary responsibilities include managing the firm's working capital and analyzing long-term investment opportunities for the firm. Dora is most likely a part of the firm's _____ team.
Financial Management
A commitment to meeting social responsibilities can contribute to a more profitable company and an increase in shareholder value.
True
A disadvantage of debt financing is that creditors often impose covenants on the borrower.
True
A downside of placing market orders is that investors may end up buying at a higher price than he or she expected to pay
True
A marketing plan is a formal document that defines marketing objectives and the specific strategies for achieving those objectives.
True
A sell limit order tells a broker to sell the shares only if the price is at or above a specified value.
True
Accounts receivable represents what customers who buy on credit owe the firm.
True
Both producers and retailers tend to promote shopping products.
True
Business products are purchased to use either directly or indirectly in a production process.
True
Cannibalization occurs when a producer offers a new product that takes sales away from its existing products.
True
Cash budgets normally cover a one-year period and show projected cash inflows and outflows for each month.
True
Certificate of deposit is an interest-earning deposit that requires the funds to remain deposited for a fixed term.
True
Cherry Doux Bakery reaches an agreement with Candy Call to use Candy Call's original dark chocolate in its popular chocolate cookies and sell them in its stores. The two companies are using a strategy known as cobranding
True
Commercial paper, which is sometimes issued for as little as two days, can be issued for up to 270 days.
True
Competitive advertising is a key marketing strategy of the maturity phase of a product life cycle.
True
David needs to acquire financial capital to purchase a printing press for his business. David can either acquire the financial capital for the press by borrowing money from a bank or by purchasing the press on credit from his supplier.
True
Dynamically continuous innovations are characterized by marked changes to existing products.
True
In a public offering, securities are sold to anyone among the interested investors who are willing and financially able to buy them.
True
In the context of bonds, the current yield expresses a bond's interest payment as a percentage of the bond's present market price rather than its par value.
True
In the context of branding, line extensions are similar products offered under the same brand name.
True
In the context of business products, the marketing tactics of maintenance products emphasize efficiency.
True
In the context of each NASDAQ stock, the bid price indicates how much a market maker will pay per share to buy a stated quantity of the stock.
True
In the context of marketing research, secondary data is existing data that marketers gather or purchase for a research project.
True
Investors who employ a buy-and-hold investment approach invest in index mutual funds and exchange-traded funds.
True
One of the key responsibilities of an investment bank is to arrange for the actual sale of the securities.
True
Par value is the value of a bond at its maturity; what the issuer promises to pay the bondholder when the bond matures.
True
Passed during the early twenty-first century, the Sarbanes-Oxley Act included provisions to ensure that external auditors offered fair, unbiased opinions when they examined a company's financial statements.
True
Primary data is the new data that marketers compile for a specific research project.
True
Product diffusion happens at different speeds, depending on the individual consumer and on the product itself.
True
The Dodd-Frank Act of 2010 created the Financial Stability Oversight Council to identify emerging risks in the financial sector so that action could be taken to rein in risky practices before they led to a crisis.
True
The extent to which retained earnings are used as a source of long-term capital for a firm, depends on the state of the economy.
True
The goal of continuous innovation is to distinguish a product from the competition.
True
The prices of unsought products vary wildly.
True
The social/cultural element of the marketing environment covers a vast array of factors, including lifestyle, customs, language, attitudes, interests, and population shifts.
True
Through the use of technology, marketers can lower costs and deliver greater value to their customers.
True
The stocks of firms that do not meet the listing requirements of stock exchanges are traded on the _____.
Over-the-counter market
Which of the following is a difference between common stockholders and preferred stockholders?
Common stockholders are assured a greater capital gain than preferred stockholders when a company experiences strong earnings.
Arnoury, a car service station, takes feedback from clients after servicing their cars, which gives the clients a sense of importance. Arnoury's management also ensures rectification and improvement of its services based on clients' feedback. Which of the following marketing strategies does this scenario best illustrate?
Customer relationship management
Mrs. Jamieson, a retiree, likes to invest in preferred stocks and bonds as it involves very little risk. She knows that the value of many of these stocks will not increase drastically, but the small returns help supplement her pension. Mrs. Jamieson's approach is an example of the market timing strategy.
False
National Association of Securities Dealers Automated Quotation System (NASDAQ) started as a physical location where brokers met to buy and sell stocks for their clients.
False
People marketing involves drawing people to a particular place.
False
Primary data tends to be lower in cost than secondary data.
False
Private placements are usually more time consuming and complex than public offerings.
False
Projects with potential for high returns generally have a low degree of uncertainty and risk.
False
Recycle, don't drink and drive, buckle your seatbelt, support our political party, donate blood, and don't smoke are all examples of popular causes that use event marketing.
False
Return-on-equity indicates how much net income a firm earned per share of common stock outstanding.
False
Shopping products are the inexpensive goods and services that consumers buy frequently with limited consideration and analysis.
False
Store brands are also called manufacturers' brands.
False
Term loans issued by commercial banks are popularly used by financial institutions and large corporations because they typically carry lower interest rates than commercial paper.
False
The Sarbanes-Oxley Act of 2002 reversed the Glass-Steagall Act's prohibition of banks selling insurance or acting as investment banks.
False
The commerce ministry of Setina Islands, a tax haven country, has been advertising the country's business opportunities and tourist-friendly culture in various international magazines. The advertisements illustrate idea marketing.
False
The current ratio is calculated by dividing a firm's current liabilities by its total assets.
False
The date a bond comes due is called its record date.
False
The difference between the prices at which securities are bought and sold is called a thrift.
False
The idea screening stage of the new product development process involves the formal process of soliciting feedback from consumers by trying out the product concept.
False
The marketing concept has gathered momentum across the economy, leading to the marketing era, unfolding over the last decade, which zeros in on long-term customer relationships.
False
The two key aspects of product quality are level and longevity.
False
In the context of product adoption and diffusion, which of the following questions relates to the product characteristic of trialability?
How easily can potential consumers sample the new product?
Which of the following statements is true of commercial paper?
It is not backed by a pledge of collateral.
A _____ is an order to a broker to buy a specific stock only if its price is below a certain level, or to sell a specific stock only if its price is above a certain level.
Limit order
Which of the following marketing strategies can be best employed for attracting tourists?
Place Marketing
Which of the following characteristics of a well-chosen target market states that the people of the target market must be willing and able to spend more than the cost of producing and marketing a product?
Profitability
A health-drink company faces a lot of flak for misquoting the nutritional facts on its product packages. Once it clears the charges, the company hires a firm that helps it in reviving a positive image in the media as well as the broader community. The firm's primary task is to constantly communicate with the media personnel and make sure that the media runs unpaid stories that create a favorable impression about the company. This scenario exemplifies the use of:
Public Relations
Which of the following has incited leading-edge marketers to set higher standards in key areas such as environmentalism, abolishment of sweatshops, and involvement in the local community?
Social Responsibility
Jessica, a business tycoon, always buys her jewelry from a retailer. She has been a loyal customer, and she does not trust other brands. This scenario exemplifies the purchase of _____.
Specialty Products
In the year 1938, Popoud, a chocolate manufacturing company, was finding it difficult to trade its products because people were reluctant to spend money on nonessential goods. However, the company continued to manufacture chocolates in large quantities. In the context of the evolution of marketing, which of the following eras does this scenario most likely refer to?
The Selling era
Which of the following statements is true of open-end mutual funds?
They redeem old shares when investors want to cash in.
The goal of a knockoff is:
To Copy a competition
Duk Yu, a beverage company, buys its raw materials from Nessange, a fruits and vegetables exporting company, without making any payment at the time of purchase. Instead, Nessange allows Duk Yu to pay the total purchase amount within a period of six months. Which of the following short-term financing options is being used by Duk Yu in the given scenario?
Trade Credit
cash equivalents
_____ are safe and highly liquid assets that many firms list with their cash holdings on their balance sheet.
In the introduction stage of the product life cycle, companies are primarily focused on:
building customer awareness of the product
