Business Ethics - Exam 2
b.
How did Fannie Mae discover the flaws in its computer model for amortization? a. The OFHEAO report disclosed them b. Former employee Roger Barnes raised concerns c. Both a and b d. None of the above
a.
In which stage of the regulatory cycle do scientific studies document an evolving issue? a. Latency b. Awareness c. Activism d. Regulation/litigation
b.
Where in the regulatory cycle would you place text messaging? a. Latency b. Awareness c. Activism d. Regulation/Litigation
b.
Which is the number one cause of mortgage foreclosures? a. Loss of employment b. Negative equity c. Poor credit score d. Low down payment
d.
Which of the following best describes Craigslist's liability for content on its site? a. It is liable for any criminal activity that results from posting on its site b. It does not have an obligation to remove ads that involve criminal activity c. It must screen all ads d. None of the above
b.
Social responsibility by a business: a. Is a doctrine developed by economist Milton Friedman. b. Requires a business to examine how its decisions affect its stakeholders, not just its shareholders. c. Is not part of a discussion of business ethics. d. None of the above
a.
Stakeholder Theory: a. Requires business to consider other groups beyond shareholders when making decisions. b. Is a free market theory. c. Requires property rights before allowing input on a decision. d. Both b and c e. None of the above
e.
Stakeholders in the issue of increasing the minimum wage include: a. All employees. b. Customers. c. Shareholders. d. Both a and b e. All of the above
d.
The Body Shop founder Anita Roddick said that she didn't care about making money; she only cared about making the world a better place. Into which school of social responsibility would you place Ms. Roddick? a. Inherence b. Enlightened self-interest c. Invisible hand d. Social responsibility
b.
The Turing/Shkreli pricing model would be aligned with which person's views on social responsibility? a. Marjorie Kelly b. John Mackey c. Milton Friedman d. Edward Freeman
a.
The conflicting values in the Time Warner Ice-T case are: a. First Amendment rights and duty of business to its larger community. b. Conflicts of interest and personal honesty. c. There were no conflicting values because everyone agreed with Time Warner. d. Purchasing conflicts and investments. e. None of the above
c.
The definition of "stakeholder": a. Is precise and definitive. b. Is very limited. c. Is not yet agreed upon by scholars. d. Was developed by Milton Friedman. e. None of the above
c.
The music industry's warning labels on CDs: a. Represent a new regulation of rock music. b. Are an unconstitutional infringement of free speech. c. Are a means of halting the regulatory cycle. d. Were voluntary and initiated originally because of industry self-examination. e. None of the above
a.
What affects company/organizational lapses? a. Incentive plans b. Individual ethical standards c. Ethics codes d. Ethics training
c.
What groups sold its Time Warner stock following the Ice-T Body Count CD release? a. NOW b. NEA c. Philadelphia municipal pension fund d. Madonna
c.
What happened to the prosecutor in the Duke LaCrosse case? a. He was re-elected after winning the case against the players b. He went on to become North Crolina's attorney general c. He was disbarred d. Both a and b
c.
What happened to the prosecutors in the Stevens case? a. They were cleared of any misconduct b. They were disbarred c. One committed suicide d. None of the above
b.
What happened when Smith & Wesson broke rank and decided to settle the gun litigation? a. It was touted as a good company and its earnings went up b. It lost its customer base c. It slowed down the gun regulatory cycle d. It was able to sell more guns at higher prices
a.
What is the order of the stages in the regulatory cycle? a. Latency, awareness, activism, and regulation/litigation b. Latency, activism, awareness, regulation/litigation c. Latency, activism, regulation/litigation, awareness d. Latency, regulation/litigation, awareness, activism
c.
What past changes had Time Warner made based on public protests on content? a. Withdrew Madonna's book b. Withdrew Last Temptation of Christ c. Corrected Porky Pig's stutter d. All of the above
a.
What percentage of total record sales is rap music? a. 10% b. 20% c. 30% d. 18%
a.
What types of ethical issues occur at the individual level? a. Inflated travel expenses b. Falsification of financial statements c. Gray area activities d. Cheating on exams
c.
What types of ethical issues occur at the societal level? a. Dabbling in gray areas b. Falsification of records c. Cheating on exams d. Insider trading
b.
What was branded in the brains of Fannie Mae employees? a. That ethics and integrity are critical to Fannie Mae's success b. 6.46 c. Compliance with SOX requirements d. Diversity
d.
What was the amount of Fannie Mae's restatement of its revenue? a. $125 million b. $90 million c. $115 million d. $6.3 billion
c.
What was the impact of the Community Reinvestment Act on Fannie Mae? a. It had to stop purchasing mortgage loans b. It could only purchase loans that were not high credit risks c. It enabled Fannie Mae to expand its portfolio substantially d. None of the above
a.
What was the issue with the Ice-T Body Count CD? a. People objected becasue the lyrics suggested killing police officers. b. The lyrics were obscene. c. The CD was not selling. d. None of the above.
c.
What was the outcome of the case against the Duke LaCrosse players? a. They were all convicted b. They were all acquitted c. The charges were dropped d. The players had both civil and criminal liability
c.
Why does John Mackey believe many people go into business? a. To maximize profits b. To lift wages of employees c. To offer a service or product that meets a need d. For personal wealth
d.
Why does a company act voluntarily in implementing procedures and equipment beyond the statutory requirements? a. To avoid criminal penalties if there is ever a misstep b. For purposes of good relations with regulators and community c. To maximize shareholder value over the long term d. Both b and c e. a, b and c
d.
XYZ Corporation expects its managers and employees to testify at congressional hearings and appear before state legislatures to advocate policy positions on everything from taxes to activities in national parks. What risk does XYZ Corporation have because of this policy? a. None because social responsibility involvement enhances the reputation of XYZ b. Backlash from those who feel differently about these issues c. Shareholder sell-offs because of the positions taken d. Both b and c
b.
Businesses must face social issues because: a. It is the right thing to do. b. They can affect profits. c. The U.S. Constitution requires them to do so. d. None of the above
b.
Chipotle's setbacks in sales were: a. The result of poor menu choices. b. The result of food safety issues. c. The result of employee wages. d. The result of donations Chipotle made to certain groups.
False
(T/F) Edward Freeman brought stakeholder theory into business strategy.
False
(T/F) Fannie Mae no longer exists.
True
(T/F) Fast-and-easy mortgage loans were largely undocumented loans.
True
(T/F) Halfon and Freeman are in agreement on the basics of stakeholder theory.
True
(T/F) Halfon and Friedman are in agreement on the social responsibility of a corporation.
True
(T/F) Herman Miller abandoned the use of rain-forest woods over the objections of customers and craftsmen.
False
(T/F) Herman Miller follows a policy of compliance with existing environmental laws.
True
(T/F) Jennings and Entine propose a model of social responsibility that includes truthfulness.
True
(T/F) Milton Friedman follows the agency theory, that corporate managers are agents of shareholders.
True
(T/F) Milton Friedman supports social spending by businesses if they can show a benefit to the shareholders.
False
(T/F) Once begun, the regulatory cycle cannot be reversed.
True
(T/F) Outsourcing manufacturing jobs from the United States to developing countries is an example of a utilitarianism application.
False
(T/F) Reverse mortgages are a form of subprime lending.
False
(T/F) Robert Halfon is proponent of stakeholder theory of the corporation.
True
(T/F) Robert Halfon sees activist movements as a threat to corporate property rights.
True
(T/F) Solyndra declared bankruptcy.
False
(T/F) Stakeholder theory is grounded in ethical egoism.
True
(T/F) Stakeholders include employees and customers.
False
(T/F) Suppliers are not stakeholders in the corporation.
True
(T/F) Taking voluntary action in the latency stage can reduce the amount of regulation an industry faces.
False
(T/F) The CEO of Turing Pharmaceuticals is facing criminal charges for overpricing the company's prescription drugs.
True
(T/F) The New England Compounding Labs declared bankruptcy.
False
(T/F) The default rate on subprime mortgage loans is no higher than the default rate for conventional loans.
False
(T/F) The increase in minimum wage at Walmart did not affect existing exmployees.
False
(T/F) The subprime market did not begin unitl 2007.
False
(T/F) There is agreement among the field of scolars on the definition of stakeholders.
b.
Rain forest chic: a. Is a Ben & Jerry's flavor of ice cream. b. Is a label for branding strategies that focus on social responsibility. c. Is a slogan for the Body Shop. d. Is a Friedman term for social responsibility.
d.
Who would take issue with the philosophy, "Treat employees well because then stockholders will prosper? a. Immanuel Kant b. Marjorie Kelly c. Michael Novak d. Both a and b e. All of the above
c.
Whom does Marjorie Kelly believe should be rewarded the most for the creation of wealth in a corporation? a. The shareholders b. The executive team c. The employees d.a and b e.All of the above
True
(T/F) A decision not to sell realistic-looking toy guns is an example of an ethical choice not mandated by law.
False
(T/F) Ashley Madison declared bankruptcy.
True
(T/F) CVS pulled tobacco products from many of its stores.
False
(T/F) Chipolte declared bankruptcy.
True
(T/F) Companies that donate to Planned Parenthood experience backlash regardless of their donations to the group.
True
(T/F) Countrywide was acquired by Bank of America.
False
(T/F) Countrywide went bankrupt.
True
(T/F) Craigslist is not required by law to screen ads placed on its online service for illegal conduct.
False
(T/F) Decisions on corporate charitable contributions carry no ethical implications.
a.
Accourding to Milton Friedman, an executive imposes taxes on shareholders when: a. her or she uses coporate funds for social causes. b. he or she fails to take all available deductions. c. he or she pays dividends. d. all of the above.
c.
As the regulatory cycle progresses: a. Options increase and cost decreases. b. Options decrease and cost decreases. c. Options decrease and cost increases. d. Options increase and cost increases.
d.
At what level of ethical lapses is the use of PEDs by players? a. Individual b. Company/organization c. Industry d. Society
d.
Fannie Mae's policies on amortization: a. Met accounting standards. b. Were developed by the CFO and controller. c. Were adjusted for arbitrary volatility. d. All of the above
b.
Following Body Count: a. Time Warner went exclusively into rap music. b. Time Warner shifted strategically into family-oriented entertainment. c. Time Warner released no more rap albums. d. Both b and c
c.
Following Body Count: a. Ice-T left the Time Warner label. b. Ice-T became impoverished. c. Ice-T became a detective on Law and Order. d. a, b and c e. a and c only
b.
John Mackey believes which of the following? a. He agrees with Kelly's views b. He believes "service to others" should be the corporate mantra c. He believes that Friedman's views are correct d. He believes that Halfon's views are correct
c.
John Mackey's views are similar to those of which of the following? a. Milton Friedman b. Robert Halfon c. Marjorie Kelly d. Jon Entine and Marianne Jennings
c.
Milton Friedman's view on executive compensation is: a. That government should control it. b. That there should be established ranges. c. That shareholders should undertake controls if they deem it necessary. d.None of the above
d.
Place the following in the order of their progression in the regulatory cycle: I. Activism II. Awareness III. Latency IV. Regulation/Litigation a. I, II, III, IV b. II, III, I, IV c. III, I, II, IV d. III, II, I, IV e. None of the above is the correct order
c.
Which of the following is a characteristic of the gun regulatory debates? a. Accurate factual information b. Bipartisan agreement c. Emotion d. All of the above
d.
Which of the following is not a stage in the regulatory cycle? a. Awareness b. Activism c. Latency d. Ethical options e. All of the above are stages
e.
Which of the following is not a stakeholder in a business? a. Suppliers b. Customers c. Employees d. Community members e. All of the above are stakeholders
a.
Which of the following is not considered a stakeholder? a. Competitors b. Suppliers c. Customers d. Shareholders e. All of the above are considered stakeholders.
d.
Which of the following lists did Fannie Mae not make? a. Fortune's Best Companies for Minorities b. Best Companies for Working Mothers c. Business Ethics Most Ethical Company in America d. All of the above
a.
Which of the following's views is aligned most closely with those of Milton Friedman? a. Robert Halfon b. Anita Roddick of the Body Shop c. Edward Freeman d. Both b and c e. None of the above
b.
Which reflects Marjorie Kelly's financial model for corporations? a. Profits = Revenues - Cost b. Profits = Revenues - Employee Income + Cost of Materials c. Profits = Revenues - Cost + Shareholder distributions d. None of the above
c.
Who belives that putting shareholders first is the wrong approach to corporate governance? a. Edward Freeman b. Milton Friedman c. Marjorie Kelly d. Robert Halfon
b.
Who created Fannie Mae? a. Shareholders b. The federal government c. The Federal National Insurance Company d. None of the above
c.
Who said that the social responsibility of business is to earn a profit? a. Warren Buffett b. Albert Carr c. Milton Friedman d. None of the above
d.
Who said, "All businesses, forewarned, should be proactive, not reactive. They must be prepared to fight fire with fire and, if necessary, should be prepared to take their case all the way to the court"? a. R. Edward Freeman b. Milton Friedman c. Michael Novak d. Robert Halfon
d.
Who said, "All sensible businessmen prefer to be truthful, but they seldom feel inclined to tell the whole truth"? a. Marjorie Kelly b. Adam Smith c. Michael Novak d. Albert Carr
d.
Who said, "I don't condone cop killing. [But] to reach a more just and equitable society evebody's voice must be heard"? a. Madonna b. Nicole Miller c. David Geffen d. Jerry of Ben & Jerry's Ice Cream
c.
Who said, "I don't think that people in the media can say that advertising influences consumers to buy cars or shirts, and then argue that violence on television or in music has no impact"? a. President Bush b. Charlton Heston c. CEO of Nicole Miller d. David Geffen
d.
Who said, "The question is not about business, it's about responsibility"? a. President Clinton b. Charlton Heston c. Tracy Morrow d. David Geffen
b.
Who spoke in protest of the Ice-T CD at Time Warner's annual meeting? a. Madonna b. Charlton Heston c. David Geffen d. Jerry of Ben & Jerry's Ice Cream
b.
Who were "Friends of Angelo"? a. Friends of Angelo were the members of Countrywide's board. b. Friends of Angelo were those who received favorable and expedited mortgage decisions through Angelo Mozilo. c. Members of Countrywide's staff who received favorable mortgage terms. d. None of the above
d.
Who were the stakeholders in the CVS decision on cigarette sales? a. Smokers b. CVS shoppers c. Public health programs d. All of the above
e.
Who were the stakeholders in the subprime mortgage market? a. Mortgage lenders b. Borrowers c. Investors in mortgage-backed debt instruments d. Both a and b e. All of the above