MIE 201 Test 2

Which of the following factors has NOT been shown to lead to an increase in small​ businesses?

A healthy economy

A carefully written partnership agreement can maximize the advantages of the partnership structure and minimize the potential disadvantages. Which of the following points will help in writing an effective partnership​ agreement?

Address the hopes of each​ owner, decision-making​ strategies, and succession and exit strategies.

A(n) _________________________ is a group of individuals with particular knowledge or important connections that assists a company owner with the evaluation of strategies and decision making.

Advisory board

Companies with solid growth potential may seek public​ funding, which can be secured from​ ________.

An initial public offering (IPO)

______________ are people who invest very small amounts of personal resources early in a new​ business's life in the hopes of eventually selling a percentage of the company for a profit.

Angel investors

Which of the following are inclined to regulate decision making and limit the choices of​ employees?

Autocratic leaders

Which one of the following statements is NOT accurate in relation to shareholders and their conduct in a​ corporation?

Because shareholders elect the directors, in theory the shareholders play a significant role in corporate governance.

Which form of business has most of the characteristics of a regular corporation but adds the legal constraint that the company has to follow a specified nonfinancial​ goal?

Benefit corporation

​______ per share is the difference between what a company owns and what it owes as listed on the balance​ sheet, divided by the number of shares outstanding.

Book value

Which of the following provide new businesses with a variety of services—such as counseling and financial support—that a company needs to get under​ way?

Business incubators

A(n) _________ summarizes an anticipated company​ project, including the​ project's objectives and strategies for accomplishing those objectives.

Business plan

Which one of the following statements is NOT an accurate reflection of the definition and functions of a business​ plan?

Business plans are written soon after the company is​ launched, when the company is seeking​ funding, and when it is up and running.

Which of the following focuses on​ rationalizing, resolving​ problems, and remembering details in order to comprehend and process the material necessary for decision​ making?

Cognitive intelligence

__________ involves methods of calculating progression toward objectives and modifying strategies as needed.

Controlling

Which one of the following statements is NOT an accurate description of​ corporations?

Corporations can change from private to public ownership but not from public to private ownership.

Which one of the following private sources of funding is extremely​ risky?

Credit cards and personal lines of credit

____________ involves pursuing investment from the public for business​ ventures, investments, or loans.

Crowdfunding

Which of the following would a multinational firm use to protect itself against changes in the value of exchange​ rates?

Currency futures

Contracts whose worth is derived from an asset of some kind are called​ _____.

Derivatives

The informational roles of managers include all of the following EXCEPT which​ one?

Effective managers tend to excel at fostering relationships with many people.

______________________ is the​ optimistic, progressive aspiration to establish​ lucrative, sustainable business ventures.

Entrepreneurial spirit

What type of mutual fund is purchased or sold on a public stock​ exchange?

Exchange-traded funds

Which section of the plan should address how investors can cash out or sell their​ investment?

Exit strategy

The amount of money a bond buyer is lending to the bond issuer is called​ what?

Face value

If you have a legally binding contract to buy a financial instrument for a set price 3 months from​ today, it is called​ _______.

Financial futures

What is a disadvantage of operating a sole​ proprietorship?

Finite life span

______________ supervise employees and fulfill the strategies established throughout other levels of management.

First-line managers

A(n) ____________ is an agreement in which an entity acquires permission to retail goods and utilize certain features of another​ business's structure.

Franchise

A government issues a bond backed by its taxing power. This bond is called a​ ______.

General obligation bond

Which term defines the action when derivatives are utilized to safeguard profits against an unexpected​ loss?

Hedging

Which of the following is not a common category of private​ financing?

IPO

In order to improve the chances of success when the organization needs to​ change, managers can follow all of the steps listed below EXCEPT which​ one?

Ignore the ripple effect the change will have throughout the organization.

If investors were seeking a mutual fund that paid high dividends and​ interest, what type of fund would they​ seek?

Income funds

Federal law now requires that a majority of the directors on the board of a corporation be​ _______.

Independent

Which of the following is a​ firm's original presentation of the availability of stocks for​ purchase?

Initial public offering

"Intrapreneurship" is difficult to implement for all of the following reasons EXCEPT​ _____________.

Innovating within a larger organization is much easier

Which of the following leader roles involves offering direction to​ employees, establishing​ relationships, and acting as a representative for people both internally and​ externally?

Interpersonal role

Which of the following are skills necessary to comprehend individuals and to work together successfully with​ others?

Interpersonal skills

Which of the following have a tendency to give employees the freedom of making​ decisions, especially decisions regarding everyday​ matters?

Laissez-faire leaders

__________ represents the practice of directing and inspiring individuals to successfully work toward company objectives.

Leading

​A(n) _____________ occurs when an individual or a group of people buy a​ company's publicly traded stock mainly by using borrowed funds.

Leveraged buyout

Which term describes the ability of people to easily and quickly convert their shares into cash by selling them on the open​ market?

Liquidity

Which of the following is an advantage of​ corporations?

Longevity

If a stock is selling for​ $52.50 per share on New York Stock​ Exchange, it refers to which of​ these?

Market value

Two businesses coming together to form a single company is known as​ a(n) __________.

Merger

______________ represent establishments that offer minor quantities of capital to company owners who might not be eligible for conventional loans.

Microlenders

___________ are typically responsible for establishing​ objectives, fulfilling​ goals, and organizing work for other levels of management.

Middle managers

The​ ________ section of a business plan explains the purpose of the business and what it hopes to accomplish.

Mission and objectives

A​ ____________ is a declaration of why a company exists and what it intends to achieve for consumers and stakeholders.

Mission statement

When seeking to sell​ short-term debt​ instruments, what market would be most​ useful?

Money market

Which one of the following statements is NOT accurate in relation to the responsibilities of the board of directors of a​ corporation?

Much of the attention focused on corporate reform in recent years has zeroed in on boards being not too closely allied with management.

Which of these​ represent(s) a financial instrument that brings money from various different people to buy a diversified mix of​ stocks, bonds, or other​ securities?

Mutual fund

Which of the following is a computerized stock​ exchange?

NASDAQ

All of the following are interrelated steps of the​ "strategic planning​ process" EXCEPT which​ one?

Networking with people within and outside the organization

Which mutual funds do not charge a sales commission during either purchase time or selling​ time?

No-load

Many cities and states have​ a(n) ____________ that helps companies succeed and contribute to the local or regional​ economy, specifically.

Office of economic development

Which term defines the acquired right to purchase a particular number of shares of a stock at a fixed price during a specified​ period?

Option

Which of the following represents the methods of coordinating resources in order to achieve a​ company's objectives?

Organizing

Assessment of an​ organization's strengths and weaknesses relative to the opportunities and threats it faces is included in which of the strategic planning​ processes?

Performing a SWOT analysis

__________ focuses on establishing strategies and objectives for a company and proposing the best ways to achieve them.

Planning

Every public corporation is susceptible to a takeover. Which of the following is a defense against unwanted​ takeovers?

Poison pill

Which of the following is a disadvantage of​ partnerships?

Potential for conflict

Which of the following​ represent(s) a combination of common stock and corporate bonds​ characteristics?

Preferred stock

What is used to determine whether a stock is overvalued or​ undervalued?

Price/earnings ratio

Which of the following handles the selling of​ IPOs?

Primary market

Which form of business is also known as a closely held​ corporation?

Private corporation

Which of the following is a disadvantage of​ corporations?

Reporting requirements

________________ is the initial collection of resources expended in order to establish a company.

Seed money

Investors who purchase shares of stock in a company are called​ ________.

Shareholders

Which of the following is a way that smaller companies differ from larger​ companies?

Small firms have a narrow focus

Which statement describes the advantage of operating a sole​ proprietorship?

Sole proprietors have more privacy and generally are not required to report anything to anyone

A business that is owned by one individual is a​ __________.

Sole proprietorship

Which one of the following statements describes a disadvantage of operating a sole​ proprietorship?

Sole proprietorships have fewer financial resources and fewer ways to get additional funds from lenders or investors.

Which of the following is LEAST likely to coordinate the sale or purchase of​ bonds?

Stock exchange

When an investor tells his or her broker to sell a stock if the price drops to a particular​ level, it is called a​ _______ order.

Stop

____________ represent the capability and knowledge needed to implement the procedures of a specific occupation.

Technical skills

Entrepreneurs can get advice and support from a wide variety of sources EXCEPT​ __________.

The US Census Bureau

Which of the following is a characteristic of a general​ partnership?

The partners have joint liability for the​ firm's financial obligations.

If a rating agency determines that a​ company's finances are​ deteriorating, what happens to the bonds issued by that​ company?

They are downgraded

Which of the following is NOT a major contribution of small​ businesses?

They meet the needs of smaller organizations

Which of the following statements accurately represents the responsibilities of middle managers in the management​ pyramid?

They offer very important coaching and mentoring for​ first-line managers.

Bonds issued by the U.S. government that are repaid in less than 1 year are called​ _____.

Treasury bills

Which of the following is a disadvantage of​ partnerships?

Unlimited liability

Which one of the following statements is NOT a true representation of​ top-level managers in the management​ pyramid?

Upper-level managers select top managers.

A​ _____________ is a succinct expression of the philosophies that influence a​ corporation's decisions and actions.

Value statement

Financiers who offer capital to support​ start-up companies in order to gain a percentage of​ ownership, with the goal of eventually turning the company around and selling it for a​ profit, are called​ ____________.

Venture capitalists

A short expression of what the business aims to be is known as​ a(n) ________.

Vision statement

If a purchaser buys a​ bond, the interest income received from the bond is referred to as the​ __________.

Yield rate

When Joanna compares her​ company's key performance features with those of industry​ front-runners, she is​ ____________.

benchmarking

An S corporation is a​ ________.

corporation allowed to sell stock to a limited number of investors while enjoying the​ pass-through taxation of a partnership

A​ ________ has unlimited​ liability, but the various​ _______ who own the stock face only limited liability.

corporation; shareholders

Performing the decisional​ role, managers​ ________.

decide about setting product prices and selecting employees

Allowing employees some authority and including them in​ decision-making activities is characteristic of​ ____________.

democratic leaders

A business structure in which every partner is liable only for his or her own activities and at least partially liable for the partnership as a whole is known as a​ __________.

limited liability partnership (LLP)

A business with one or more general partners with the same unlimited liability as a sole proprietor is known as a​ __________.

limited partnership

When a mutual fund charges a sales commission during purchase​ time, selling​ time, or​ both, it is called​ a(n) _____ fund.

load

When you own a part of or equity in a​ company, it refers to​ _____.

stock

Laissez-faire leaders take the role of​ ________.

supporters and​ consultants, encouraging​ employees' ideas and proposing insights when asked

Compared with starting a new​ business, buying an existing business has both advantages and disadvantages. One of the disadvantages of buying an existing business is​ ________.

the potential for a considerable amount of financing