MIE Test 2

A government issues a bond backed by its taxing power. This bond is called a​ ______. A. treasury bond B. general obligation bond C. revenue bond D. municipal bond E. savings bond

B

Which one of the following statements describes a disadvantage of operating a sole​ proprietorship? A. Sole proprietors are required to get approval from a business​ partner, boss, or board of directors to change any aspect of their business strategy or tactics. B. Sole proprietorships have fewer financial resources and fewer ways to get additional funds from lenders or investors. C. Sole proprietors have less privacy and generally are required to report everything to others in the business. D. Income tax is a very complex matter for sole proprietorships compared with other forms. E. A sole proprietorship is difficult to establish and requires far more paperwork than do other structures.

B

If a purchaser buys a​ bond, the interest income received from the bond is referred to as the​ __________. A. face value B. duration rate C. coupon rate D. yield rate E. credit quality

D

Which of the following is an advantage of​ corporations? A. Potential for conflict B. Reporting requirements C. Simplicity D. Longevity E. Managerial demands

D

​FreshGrow, an organic vegetable​ market, is not a leader in its​ industry; is individually​ owned, managed, and​ maintained; and has 32 employees. FreshGrow is best described as a​ ______________. A. franchise B. microlender C. crowdfunder D. small business E. business incubator

D

​__________ focuses on establishing strategies and objectives for a company and proposing the best ways to achieve them. A. Controlling B. Organizing C. Coaching D. Planning E. Leading

D

A​ _____________ is a succinct expression of the philosophies that influence a​ corporation's decisions and actions. A. SWOT analysis B. goal statement C. vision statement D. mission statement E. value statement

E

A business that is owned by one individual is a​ __________. A. partnership B. master limited partnership C. sole proprietorship D. corporation E. limited liability company

C

A business with one or more general partners with the same unlimited liability as a sole proprietor is known as a​ __________. A. limited partnership B. sole proprietorship C. general partnership D. limited liability company E. master limited partnership

A

The amount of money a bond buyer is lending to the bond issuer is called​ what? A. Face value B. Yield C. Coupon rate D. Market value E. Maturity

A

Which of the following is a way that smaller companies differ from larger​ companies? A. Some firms are smaller because they do not have plans to grow. B. Smaller businesses do not have freedom to innovate and move quickly. C. Small firms have a narrow focus. D. Small businesses worry about getting by with limited resources. E. As smaller businesses grow​ larger, they tend to get more efficient and less bureaucratic.

C

Every public corporation is susceptible to a takeover. Which of the following is a defense against unwanted​ takeovers? A. Joint venture B. Proxy fight C. Poison pill D. Tender offer E. Strategic alliance

C

Federal law now requires that a majority of the directors on the board of a corporation be​ _______. A. employees in the same industry B. top management of the corporation C. independent D. sole proprietors E. competitors

C

Two businesses coming together to form a single company is known as​ a(n) __________. A. leveraged buyout B. hostile takeover C. merger D. acquisition E. joint venture

C

When you own a part of or equity in a​ company, it refers to​ _____. A. Treasury bills B. bonds C. stock D. ETFs E. mutual funds

C

Which of the following is NOT a major contribution of small​ businesses? A. They offer employment. B. They introduce novel goods. C. They meet the needs of smaller organizations. D. They add a significant amount of cash into the economy. E. They take risks larger businesses sometimes evade.

C

Which of the following is a disadvantage of​ corporations? A. Longevity B. Ability to raise capital C. Reporting requirements D. Limited liability E. Liquidity

C

A(n) _________ summarizes an anticipated company​ project, including the​ project's objectives and strategies for accomplishing those objectives. A. business plan B. financial plan C. marketing plan D. operations plan E. business incubator

A

Investors who purchase shares of stock in a company are called​ ________. A. shareholders B. general partners C. board members D. sole proprietors E. limited partners

A

Which one of the following statements is NOT accurate in relation to shareholders and their conduct in a​ corporation? A. Because shareholders elect the​ directors, in theory the shareholders are the final governing body of the corporation. B. Because shareholders elect the​ directors, institutional stockholderslong dash—such as pension​ funds, insurance​ companies, mutual​ funds, religious​ organizations, and college endowment fundslong dash—have significant impact on the governance of corporations. C. Shareholder activism has become a progressively noticeable issue in corporate governance. D. Even though most do not have any direct participation in firm​ management, shareholders play a significant role in corporate governance. E. Activist shareholders are becoming better prepared and more classy.

A

​______________________ is the​ optimistic, progressive aspiration to establish​ lucrative, sustainable business ventures. A. Entrepreneurial spirit B. Business planning C. Crowdfunding D. Intrapreneurship E. Angel investing

A

Which of the following is a characteristic of a general​ partnership? A. It is a corporation. B. The partners have joint liability for the​ firm's financial obligations. C. Partnerships do not have to pay​ taxes, but a corporation does. D. Only one partner can make decisions. E. It is owned by one individual.

B

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? A. Developing forecasts B. Analyzing the competition C. Performing a SWOT analysis D. Developing action plans E. Defining the​ organization's mission,​ vision, and values

C

A​ ________ has unlimited​ liability, but the various​ _______ who own the stock face only limited liability. A. sole​ proprietorship; individuals B. partnership; partners C. corporation; shareholders D. limited​ partnership; board members E. sole​ proprietorship; board members

C

What is a disadvantage of operating a sole​ proprietorship? A. Simplicity B. Single layer of taxation C. Finite life span D. Flexibility and control E.Privacy

C

A short expression of what the business aims to be is known as​ a(n) ________. A. mission statement B. goal C. objective D. vision statement E. values statement

D

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? A. Address the hopes of each​ owner, decision-making​ strategies, and succession and exit strategies. B. A great personal partnership cannot get in the way of successful business partnership. C. ​Dispute-resolution procedures should be​ avoided, as they apply to corporations. D. Incorporate a broad and general understanding of what the business association will be to allow for flexibility. E. A partnership agreement should strictly follow only the state​ laws, as they will drive the business.

A

What is used to determine whether a stock is overvalued or​ undervalued? A. ​Price/earnings ratio B. Book value C. Intrinsic value D. Stock buyback rate E. Market value

A

Which of the following represents the methods of coordinating resources in order to achieve a​ company's objectives? A. Organizing B. Leading C. Controlling D. Planning E. Staffing

A

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​ __________. A. general partnership B. limited liability partnership C. master limited partnership D. sole proprietorship E. corporation

B

A​ ____________ is a declaration of why a company exists and what it intends to achieve for consumers and stakeholders. A. vision statement B. mission statement C. SWOT analysis D. value statement E. goal statement

B

If a stock is selling for​ $52.50 per share on New York Stock​ Exchange, it refers to which of​ these? A. Book value B. Market value C. Face value D. Par value E. Intrinsic value

B

The​ ________ section of a business plan explains the purpose of the business and what it hopes to accomplish. A. ​start-up schedule B. mission and objectives C. major risk factors D. company overview E. operations plan

B

Which form of business is also known as a closely held​ corporation? A. Public corporation B. Private corporation C. Limited liability partnership D. Master limited partnership E. Sole proprietorship

B

Which of the following factors has NOT been shown to lead to an increase in small​ businesses? A. Social media B. A healthy economy C. Technological advances D. ​Large-scale downsizing E. Diversity in entrepreneurship

B

Which of the following is a disadvantage of​ partnerships? A. Longevity B. Potential for conflict C. Single layer of taxation D. Simplicity E. More resources

B

Which of the following leader roles involves offering direction to​ employees, establishing​ relationships, and acting as a representative for people both internally and​ externally? A. Informational role B. Interpersonal role C. Administrative role D. Technical role E. Decisional role

B

Which one of the following statements is NOT an accurate description of​ corporations? A. The stock of a public corporation is sold to anyone who has the means to buy it. B. Corporations can change from private to public ownership but not from public to private ownership. C. Public corporations are said to be publicly held or publicly traded. D. The stock of a private corporation is not made available for purchase by the public. E. Shareholders of a corporation are investors who can purchase shares of stock.

B

Which one of the following statements is NOT an accurate reflection of the definition and functions of a business​ plan? A. Business plans can provide a reality check to judge whether the business is feasible. B. A business plan guides company operations and outlines a strategy. C. Business plans are written soon after the company is​ launched, when the company is seeking​ funding, and when it is up and running. D. A business plan summarizes a proposed business venture and communicates the​ company's goals. E. Business plans can help persuade lenders and investors to finance the business.

C

______ 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. A. Face value B. Par value C. Book value D. Intrinsic value E. Market value

C

All of the following are interrelated steps of the​ "strategic planning​ process" EXCEPT which​ one? A. Developing action plans B. Performing a SWOT analysis C. Analyzing the competition D. Networking with people within and outside the organization E. Defining the​ organization's mission,​ vision, and values

D

Which one of the following statements is NOT accurate in relation to the responsibilities of the board of directors of a​ corporation? A. Directors are often paid a combination of an annual fee and stock​ options, and the right to buy company shares at an advantageous price. B. Boards are typically composed of major​ shareholders, philanthropists, and executives from other corporations. C. As the representatives of the​ shareholders, the members of the board of directors are responsible for selecting corporate officers. D. Much of the attention focused on corporate reform in recent years has zeroed in on boards being not too closely allied with management. E. Much of the attention focused on corporate reform in recent years has zeroed in on boards failing to add enough value to strategy planning.

D

Which statement describes the advantage of operating a sole​ proprietorship? A. An important financial advantage in many sole proprietorships is the opportunity to share costs. B. Sole proprietorships are​ liquid, which also helps give them a long life​ span; when shareholders sell or bequeath their​ shares, ownership simply passes to a new​ generation, so to speak. C. Sole proprietorships have the ability to pool money by selling shares of stock to outside investors. D. Sole proprietors have more privacy and generally are not required to report anything to anyone. E. In a sole​ proprietorship, the owner and the business are legally inseparable

D

Which term describes the ability of people to easily and quickly convert their shares into cash by selling them on the open​ market? A.Longevity B. Potential for conflict C. Limited liability D. Liquidity E. Reporting requirements

D

​A(n) _____________ occurs when an individual or a group of people buy a​ company's publicly traded stock mainly by using borrowed funds. A. hostile takeover B. acquisition C. joint venture D. leveraged buyout E. merger

D

An S corporation is a​ ________. A. ​profit-seeking corporation whose charter also requires it to pursue a stated social or environmental goal B. company whose stock is held by few owners and is not available for sale to the public C. corporation whose stock is sold to the general public D. corporation not allowed to sell stock to investors E. corporation allowed to sell stock to a limited number of investors while enjoying the​ pass-through taxation of a partnership

E

Bonds issued by the U.S. government that are repaid in less than 1 year are called​ _____. A. savings bonds B. treasury notes C. Treasury​ Inflation-Protected Securities D. Treasury bonds E. Treasury bills

E

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​ ________. A. a purchased existing business comes with proven products or services B. a purchased healthy business comes with an established customer base C. an established business comes with functioning systems D. financing an existing business is much easier E. the potential for a considerable amount of financing

E

If a rating agency determines that a​ company's finances are​ deteriorating, what happens to the bonds issued by that​ company? A. They become​ zero-coupon bonds. B. The face value is changed. C. They issue a call provision. D. They are defaulted on. E. They are downgraded.

E

Performing the decisional​ role, managers​ ________. A. tend to excel at fostering relationships with many people B. risk getting away from​ day-to-day work C. rely on subordinates to​ collect, analyze, and summarize information D. spend a fair amount of time gathering information E. decide about setting product prices and selecting employees

E

The informational roles of managers include all of the following EXCEPT which​ one? A. Managers rely on subordinates to​ collect, analyze, and summarize information. B. In order to fulfill informational​ role, managers risk getting away from​ day-to-day work. C. Managers spend a reasonable amount of time collecting information. D. Managers use technology to keep in touch with information related to their business. E. Effective managers tend to excel at fostering relationships with many people.

E

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? A. Private corporation B. General partnership corporation C. Limited liability corporation D. S corporation E. Benefit corporation

E

Which of the following is a disadvantage of​ partnerships? A. Simplicity B. Cost sharing C. Single layer of taxation D. More resources E. Unlimited liability

E

Which of the following​ represent(s) a combination of common stock and corporate bonds​ characteristics? A. Treasury bonds B. ETFs C. Index funds D. Mutual fund E. Preferred stock

E

​"Intrapreneurship" is difficult to implement for all of the following reasons EXCEPT​ _____________. A. organizations can develop habits based on behaviors B. injecting the entrepreneurial spirit sometimes means going against the accepted wisdom C. mechanisms put in place to prevent mistakes can hamper innovative thinking D. innovative behavior and entrepreneurial spirit can lead to risky behavior E. innovating within a larger organization is often much easier

E