BUSI Final
Which of the following statements is true of financial leverage?
It is the use of debt in a firm's capital structure.
Which of the following is true about new product development?
It requires an understanding of the customer base and involves creativity.
Which of the following is a disadvantage of market timing?
It requires investors to make frequent trades.
Which of the following is a drawback of primary data?
It tends to be expensive.
In the context of the marketing mix, which of the following statements is true of a distribution strategy?
Its key decisions include shipping, warehousing, and selling outlets.
Glen wants to find the stock prices of some of the large actively traded companies listed on the Tokyo Stock Exchange. Which of the following stock indices should Glen follow?
The Nikkei 225
__________is an asset management ratio that measures how quickly a firm sells its stock to generate revenue.
The inventory turnover ratio
A whole range of public and private organizations market beliefs that are meant to change how people think or act. This is referred to as__________.
idea marketing
Which of the following statements best describes a highly leveraged firm?
It is a firm that relies heavily on debt.
__________refers to how well a product performs its core function.
Quality level
Which of the following exemplifies a discontinuous innovation?
Shinzen Labs, a food analysis and research laboratory, develops a food packaging material that repels bugs and rodents.
Which of the following is a difference between dividends on stock and interest on bonds?
A firm has a legal obligation to pay interest on bonds, whereas it has no legal obligation to pay dividends on stock.
Jeremy holds 14.5% shares of stock in an automobile company. As per the company norms, if the company issues new stock, as an existing stockholder, Jeremy can buy 14.5% of the new shares before the stock is offered to the other investors of the company. Which of the following common stockholder rights does this scenario exemplify?
A preemptive right
Which of the following is a similarity between demographic segmentation and psychographic segmentation?
Both divide markets based on consumer characteristics.
Which of the following is most likely to take place when a company launches a new product that is lower in price than the current products of the company?
Cannibalization
Zetovi Corp. is a multinational communications and information technology company. It manufactures smartphones and other cell phone accessories. The company launched a range of tablets in the market, and it becomes an instant hit. The company then experiences a drastic decline in the sales of its smartphones as a large section of its customer base shifts to tablets. Which of the following concepts is being illustrated in this scenario?
Cannibalization
Lester, a hardware engineer, sells his old hatchback to buy a luxury sedan. As he starts driving the new car, he realizes that it is more difficult to maneuver the sedan than his old hatchback. He also realizes that maintaining the sedan is expensive. Lester is rather uncomfortable with the purchase decision he made. In the context of consumer behavior, which of the following concepts does this scenario best illustrate?
Cognitive dissonance
__________is the description of how people act when they are buying, using, and discarding goods and services for their own personal consumption.
Consumer behavior
_____ tools include premiums, promotional products, samples, coupons, rebates, and displays.
Consumer promotion
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
_____ is the ongoing process of acquiring, maintaining, and growing profitable customer associations by delivering unmatched value.
Customer relationship management
Keitras is a women's apparel store that specializes in winter clothing. It targets university students aged 20-25 with its trendy collection of sweaters, sweatshirts, stockings, and stoles. In the context of consumer market segmentation, which of the following types of market segmentation does Keitras most likely follow?
Demographic segmentation
Which of the following is a difference between demographic segmentation and geographic segmentation?
Demographic segmentation refers to dividing the market based on measurable characteristics about people, whereas geographic segmentation refers to dividing the market based on where consumers live.
Which of the following is true of stock exchanges?
Each exchange establishes its own requirements for the securities it lists.
Gearjazz, a company that manufactures and sells musical instruments, aims to increase its popularity among music artists and enthusiasts by sponsoring the audio system for the music and arts festival being held in the town of Flavempia. Which of the following marketing strategies does this scenario best illustrate?
Event marketing
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
If an invoice lists the terms of trade credit as 2/10 net 30, it means that the supplier is offering a 10 percent cash discount off the invoice price if the buyer pays within 2 days.
False
Return-on-equity indicates how much net income a firm earned per share of common stock outstanding.
False
The current ratio is calculated by dividing a firm's current liabilities by its total assets.
False
The difference between the prices at which securities are bought and sold is called a thrift.
False
Habetts, a company that sells cell phone accessories, introduced a new range of cell phone covers in various patterns that read the following: "I don't drink and drive because I love my family." Which of the following marketing strategies does this scenario best illustrate?
Idea marketing
The water authority of the metropolitan city of Bongkasea put up a sign near all public water taps that read the following: "Turn me off after use because I may not be free of cost in 2050." Which of the following marketing strategies does this scenario best illustrate?
Idea marketing
Which of the following is true of financial diversification?
Investing in a large number of individual securities is time consuming than investing in exchange-traded funds.
Which of the following statements is true of product-use-based market segmentation?
It helps small companies in narrowing the target markets for their products.
Which of the following is true of licensing?
It involves a payment of fee to the core brand.
_____ are ratios that measure the extent to which a firm relies on debt financing in its capital structure.
Leverage ratios
_____ measure the ability of an organization to convert assets into the cash it needs to pay off liabilities that come due in the next year.
Liquidity ratios
Maude Shade, a fashion apparel manufacturing company, wants to invest in research before finalizing the production of its proposed product. In order to do so, it approaches Ruemen Bank and takes a loan of $80,000 in the form of bonds. Which of the following financing options is being used by Maude Shade in the given scenario?
Long-term debt
__________is found by multiplying the price per share times the number of shares of common stock outstanding.
Market Cap
Peter is starting a new business. He selects his target market by identifying similar characteristics, attributes, and behaviors of customers and then grouping them accordingly. Which of the following strategies has Peter employed?
Market segmentation
Which of the following scenarios involves the use of corporate bonds?
Nigel buys an IOU of Herbiscus Pharmaceuticals with a maturity period of eight years.
Flectamp, a new cell phone manufacturer, introduced a smart phone model, Linkul X3.4, which gets charged on solar power Television advertisements about this product show that the phone needs to be charged only once a week. Hence, several customers pre-booked this model before its launch. But after the launch of Linkul X3.4, 80 percent of its customer reviews on the Internet were bad. In the context of customer satisfaction, which of the following traps did Flectamp most likely fall into?
Overpromising
Jared Elmer is the presidential candidate of National Ernest Party, a political party. The party's election campaigns have been focusing on projecting Jared's educational qualifications, political background, ancestral glory, etc. Which of the following marketing strategies do the election campaigns illustrate?
People marketing
Tyler Connor, a famous politician who supports the ruling party of the island country of Blavanka, endorses a publishing house named Cenzefor that he owns. Many Blavankan writers want to get their books published by Cenzefor because of Connor's connection with the brand. Which of the following marketing strategies does this scenario best illustrate?
People marketing
_____ are ratios that measure the rate of return a firm is earning on various measures of investment.
Profitability ratios
Lawrence recently bought a new luxury car, but he is not completely satisfied with it. He now wishes he had bought something that would have made a better impression on his colleagues. Lawrence's friend Howard, on the other hand, bought a secondhand sedan and is extremely happy with it. Howard becomes even more proud of his purchase when his friends compliment his car. From the marketing point of view, which of the following concepts has contributed to Howard feeling satisfied with his car?
The perceived value of the car
Which of the following is true of augmented products?
They are additional goods or services that are attached to the main purchase or actual good.
Which of the following is a drawback of private placements?
They do not have the potential to raise as much money as public offerings.
Financial managers use__________to assess the financial strengths and weaknesses of their firm.
financial ratio analysis
Coastharp, a furniture e-commerce website, allows its customers to book one-hour slots during which they wish to get their furniture delivered. They can also book another one-hour slot to get the delivered furniture assembled at their convenience. The company holds back orders and delays deliveries when customers are not available to receive them. In the context of marketing, which of the following utilities does Coastharp most likely provide through its service?
Time utility
A factor is a restriction lenders impose on borrowers as a condition of providing long-term debt financing.
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
Par value is the value of a bond at its maturity; what the issuer promises to pay the bondholder when the bond matures.
True
This is a free question. Answer "True" to get credit for it.
True
Which of the following is a difference between credit unions and commercial banks?
Unlike commercial banks, credit unions are not-for-profit organizations.
Under a line of credit, in a revolving credit agreement:
a bank makes a binding commitment to provide a business with funds up to a specified credit limit at any time during the term of the agreement.
A high inventory turnover ratio is good because it indicates that:
a firm can continue its daily operations with a small amount of inventory on hand.
For successful product differentiation,:
a product should not only be different from its competitor products but also be better.
The physical good or delivered service that provides a core benefit is called the _____.
actual product
Flammox Growth Fund, a mutual fund, issues 200 shares in the market. However, because of a sharp demand from the investors, the fund issues 350 additional shares. In this scenario, the Flammox Growth Fund is structured as a(n) _____:
an open-end fund.
A fitness equipment manufacturing company initiates its new product development process. The management, along with the product design team of the company, makes estimated cost budgets for each of the potential products. This is an important part of the process as it helps the management in assessing whether the company can afford the new product. In the context of the given scenario, the company is most likely in the _____ stage of the new product development process.
analysis
Financial managers evaluate a firm's current strengths and weaknesses by computing ratios that compare values of key accounts listed on their firm's:
balance sheet and income statement.
An advantage of cobranding is that:
both partners leverage their strengths to enter new markets
A _____ can help a firm evaluate how much internal financing (funds generated by earnings) will be available for a planning period.
budgeted income statement
Damien buys stocks worth $2800 in a cosmetic products manufacturing company. His investment turns out to be a sound decision as the prices of his stocks go up by $900. In this scenario, Damien earns a _____.
capital gain
Cafemona, a brand of premium coffee, introduces three new variants—ginger coffee, hazelnut-flavored coffee, and rum-flavored coffee. This is an example of a _____.
continuous innovation
Team selling works best for:
large and complex accounts.
In the context of the new product development process, the__________stage leads to detailed descriptions of each concept with specific product features.
development
The product design team of a cosmetics manufacturing company presents its ideas for a new product. The team provides the management with detailed descriptions of each concept with specific product features. The team also makes a few samples that consumers can actually test. Given the information, the company is most likely in the _____ stage of the new product development process.
development
In the context of new product adoption, the process of a new product spreading throughout a market after it is introduced is called__________.
diffusion
Idea marketing is often combined with__________to market ideas that are meant to change how people think or act.
event marketing
Jonathan is a common stockholder in an information technology firm. Owing to his right to a residual claim on assets, he is entitled to receive a share in the proceeds of the company that is proportionate to his ownership if the company:
goes out of business.
Companies employ _____ when they actively promote the ecological benefits of their products.
green marketing
One drawback of exchange-traded funds (ETFs) is that investors:
have to pay brokerage commissions every time they buy or sell shares.
According to critics, the Glass-Steagall Act:
impeded financial innovation
A(n) _____ is the first time a company issues stock that may be bought by the general public.
initial public offering
Longevo, a watch manufacturing company, offers watches in a wide range of designs to suit all age groups. To adequately cover its wide and diversified consumer base, the company makes use of all the traditional and new age media platforms for its promotions. The promotional strategy used by Longevo is _____.
integrated marketing communication
A(n) _____ is a financial intermediary that specializes in helping firms raise financial capital by issuing securities in primary markets.
investment bank
The time value of money reflects the fact that:
it is best to have money today, so it can be put to work sooner to make even more money.
The main disadvantage of financial leverage is that:
it reduces the financial return to stockholders' investment when times are bad.
Kiddiecon, a company that manufactures stationery products for children, signs a contract with an animation studio to use one of its popular cartoon characters as a design on its school bags. Kiddiecon's contract with the animation studio is an example of _____.
licensing
Zollien, a manufacturer of men's shirts and jackets, has reached an agreement with Arbrada Inc. According to the agreement, Zollien will pay Arbrada a substantial fee for the right to use Arbrada's name and logo on some of its clothing lines. This type of arrangement is known as:
licensing
Operos, a laptop manufacturing company, introduces three new colors—midnight blue, aquamarine, and hot pink—in its Z Series laptops. This scenario reflects _____.
line extension
The stocks of firms that do not meet the listing requirements of stock exchanges are traded on the _____.
over-the-counter market
Urasil Mobil Corporation is a small petrochemicals firm. Since the owners of the firm do not want to pay a high listing fee, the firm's shares are not listed on an organized exchange. In this case, Urasil Mobil Corporation would trade its stocks in the _____.
over-the-counter market
Elliot holds a bond in a health care company that matures after a period of ten years. Taken together with the interest on the principal amount, on maturity, Elliot will receive a sum of $55,000, which is the bond's _____.
par value
A(n)_____ is a type of stock that gives its holder priority over common stockholders in terms of dividends and claims on assets.
preferred stock
A home décor company manufactures a range of bedding products such as bedspreads, pillows, and mattresses. The range of bedding products represents the _____ of the company.
product line
In the context of business product categories, the marketing of component parts and processed materials emphasizes:
product quality, price, and service
Jim works in the marketing department of a smartphone manufacturing firm. He is currently working on ideas for a new package design for the company's latest range of smartphones. In the context of the company's marketing mix, Jim's ideas contribute to the _____.
product strategy
In the context of customer relationship management (CRM), a firm selling a high-ticket product to a small customer base is most likely to:
pursue a full partnership with each of its key clients.
In the context of a public offering, a(n)__________is a complex document that must include a firm's key financial statements plus additional information about the company's management, its properties, its competition, and the intended uses for the funds it plans to obtain from the offering.
registration statement
Since common stockholders are the true owners, preferred stockholders' dividends are deducted from net income before computing _____.
return on equity
Product augmentation:
sharpens the competitive edge of the marketer's products.
A drawback of actively managed funds is:
that significant tax consequences occur when there is a lot of trading.
Consumers tend to view sponsorships in a positive light because:
they are clearly connected to events that matter to the target audience.
Financial managers emphasize the goal of maximizing the market price of stock because:
they have a fiduciary duty.
A health and fitness startup company goes for an initial public offering. For assistance, it enters into a firm commitment arrangement with an investment bank. As per the agreement, the investment bank itself will purchase all the shares at a specified price. This will guarantee that the company will receive a fixed amount of new funds. This scenario exemplifies a(n) _____.
underwriting