MIE 201 Test 2
You invest $6,000 in a no-load mutual fund whose net asset value per share is $36. How many shares of mutual fund will you receive if the coupon is a 8 percent?
166.66
Crowdfunding
A combination of private and public financing
Which of the following is a valid observation of corporations?
A corporation is distinct from the people running it.
A product-extension merger occurs when _______.
A merger expands the mix of goods and services available for sale.
A product-extension merger occurs when __________.
A merger expands the mix of goods and services available for sale.
Which of the following is the best example of a technical skill that managers must possess?
Ability to prepare a formal profit and loss statement
A(n) _____________ is a form of "group mentoring" in which you assemble a team of people with subject-area expertise or vital contacts to help review plans and decisions.
Advisory board
Pacific Electronics is a Swiss corporation doing business in the U.S. it was incorporated in Switzerland, in the year 1997. The company sells products such as electronic measuring devices, microprocessors, and microcontrollers. Pacific Electronics is called a(n).
Alien corporation. Because it is a corporation that operates in the US but is incorporated in another country.
Strategic alliances are ___________.
An alternative to mergers and acquisitions with less risk and work.
Strategic alliances are _____________.
An alternative to mergers and acquisitions with less risk and work.
Corporate officers of a company _________.
Are hired by the board of directors of a company
Corporate officers of a company ________.
Are hired by the board of directors of a company.
Corporate officers of a company __________.
Are hired by the board of directors of a company.
Arthur is a plant supervisor at Skyline Constructions. 20 construction workers report to Arthur. Arthur provides them the work designs and schedules every week and does no allow them to make any changes to the schedule. Workers often complain that he is not receptive to suggestions from them. Arthur is following _______ leadership in this case.
Autocratic
Under ___________ leadership, subordinates have little or no freedom to make decisions, deviate from plans, or provide contrary input.
Autocratic
Dobex Investors is a fund management company. Most of the firms funds are invested in a wide mixture of stocks and bonds. Such funds are called _____ funds.
Balanced.
A buyer engages in short selling when he or she _______.
Believes that a stocks price is about to drop.
RSS Bank is registered as a corporation in Maryland. Apart from its financial objectives, the company has also formed a legal requirement to work for the welfare of the elderly citizens in the state. The bank is obligated to work for the cause even if there is a change in ownership. Based on this information, it can be concluded that RSS bank is a(n) __________________.
Benefit corporation.
Stocks of major, well-established corporations with demonstrated ability to manage their way through every kind of economic condition are known as ___________ stocks.
Blue chip
Barbara decided to open an independent bookstore. However, after careful consideration, she decided to purchase an existing book shop called BookStop from an owner who was retiring. Which of the following statements, if true, is most likely to make Barbara's business successful?
BookStop was a profitable business with many loyal customers.
Arabex is a stock market in one of the developing countries. Most of the stocks listed in the market are increasing in value. Arabex is an example of a(n) ______________.
Bull market
______________ are centers that provide a small business with a wide array of support resources and services during its early growth phase.
Business incubators
Who is the highest-ranked officer of a corporation?
Chief executive officer
Robex Retail forms a contract with one of its suppliers to buy specific amounts of agricultural produce at a later date. This contract is an example of a(n) _________.
Commodities future
Benchmarking refers to
Comparing process and performance data from other companies
______________ skills refer to the ability to understand the relationship of parts to the whole.
Conceptual
A ________ merger occurs when companies in unrelated industries join to form a single entity.
Conglomerate
Directly intervening in organizational processes to improve performance is an example of the ___________ function of management.
Controlling
Keri Sears uses the funding platform Kickstarter to solicit money to start a not-for-profit organization that promotes folk musicians and revives interest in the folk and traditional forms of music in America. She invites people to fund the businesses project and she states that donors will be honored on the organization's website. She sets a six month goal to raise money. Keri is using which of the following forms of financing?
Crowdfunding
Jackson Associates is a firm that owns many stationary stores across the US. The company's stock performance is highly linked to the overall performance of the stock market. The company's stock performs well when the economy and the stock market perform well and vice-versa. Jackson Associates is an example of a(n) ___________ stock.
Cyclical
_______________ skills refer to the ability to identify a decision situation, analyze the problem, weight the alternatives, choose an alternative, implement it, and evaluate and results.
Decision-making
You want to trade some of the futures that you have. Which of the following markets will facilitate such a trade?
Derivatives market.
A vertical merger occurs when __________.
Different stages or levels of the same industry unite.
No-load funds are mutual funds that ___________.
Do not charge sales commission
No-load funds are mutual funds that __________.
Do not charge sales commission.
In the United States, a corporation is called a domestic corporation if it _________.
Does business only in the sate where it is chartered.
Technical Solutions Inc. is a leading software solutions firm in Dallas with 1000 employees, is facing a financial crunch because of the economic downfall. Several of its key investors have backed out, and it has lost some projects to its competitors. The SEO of the company considers cost-cutting measures to turn around the organization. An analysis of the situation reveals that many of its employees have become redundant as their work roles have reduced considerably. The firm also employs a large number of people who are almost at the retirement age. Which of the following measures will be most appropriate for the company, from a business perspective?
Downsizing
A(n) _______________ is a tool that provides quick-read summarizes of vital performance variables.
Executive dashboard
Stock exchanges are organizations that _______________.
Facilitate the buying and selling of stock.
A corporation itself has limited liability on its transactions. True or False.
False
A joint venture does not result in a separate legal entity. True or False.
False
A management pyramid is used to exhibit managerial roles without defining a corporate hierarchy. True or False.
False
A manager completely hands over operational decision making to her subordinates. This manager is a democratic leader. True or False.
False
A mission statement is a statement of the operational goals of the organization
False
An economic slowdown is viewed as a weakness in the SWOT analysis of a firm. True or False.
False
An investment buys a right and obligation when he or she buys an option. True or False
False
An investor buys a right and obligation when he or she buys an option. True or False.
False
Angel investors provide money to finance new businesses in exchange for a large rate of interest.
False
Bear market is a market situation in which most stocks are increasing in value. True or False.
False
Controlling is the process of motivating employees to be committed toward the organization's values. True or False.
False
Funds that invest in foreign and U.S. securities are called international funds. True or False.
False
One company buys a controlling interest in the voting stock of another company in a merger.
False
Outsourcing reduces opportunities for small businesses and entrepreneurs. True or False.
False
Ownership has limited personal liability for the business's financial obligations in sole proprietorships. True or False.
False
Qualitative managerial forecasts are based on historical data and involve complex statistical computations. True or False.
False
The federal government recognizes a sole proprietorship as an independent taxable entity. True or False
False
The stock of private corporation is made available for purchase by the public. True or False.
False
A mission statement is a statement of the operational goals of the organization. True or False.
False.
Albert buys the stock of an established corporation, mainly to obtain good dividends. However, the cooperation's growth is limited. This stock is an example of a defensive stock. True or False.
False.
Autocratic leaders allow subordinates to make all the decisions concerning their performance. True or False.
False.
Financing a business you are starting from scratch is often easier than financing an existing business.
False.
Investing in bonds typically has higher risk than investing in stocks. True or False.
False.
Preferred stock appreciates in value much faster than common stock. True or false.
False.
The stock of a private corporation is made available for purchase by the public. True or False.
False.
The chief operating officer is the highest-ranking officer of a corporation. True or False.
False. Corporate officers are at the top.
One company buys a controlling interest in the voting stock of another company in a merger. True or False.
False. In a merger two companies join together to form a single entity.
The federal government recognizes a sole proprietorship as an independent taxable entity. True or False.
False. Income tax is a straightforward matter for sole proprietorships. The federal government doesn't recognize a sole proprietorship as an independent taxable entity.
Unlike a corporation board of directors, an advisory board has legal responsibilities.
False. It does not have legal responsiblities
In the business plan, the exit strategy explains how and when the owner will close her business. True or False
False. It explains how investors will be able to cash out or sell their investment.
A master limited partnership is not allowed to raise money by selling units of ownership to the general public. True or False.
False. It is allowed to raise money by selling units of ownership to the general public just like corporations sell shares of stock to the public.
Treasury bonds are short-term debt securities issued by the federal government that are repaid within a year. True or False.
False. Long with more than 10 years.
The start-up schedule section in a business plan would forecast its income, expenses, and cash flow for the first 3 years of business.
False. Major aspects
Money-market funds are financial instruments that invest in stocks considered to be selling below their true value. True or False.
False. Money-market invest in high-quality short term debt issues.
A stock split is performed if a company's management team believes that the firm's shares are undervalued. True or False.
False. Overvalued.
Owner has a limited personal liability for the business's financial obligations in sole proprietorships. True or False.
False. Owner has UNLIMITED liability.
SCORE is an acronym for the Service corps of retired entrepreneurs.
False. Service Corps of Retired Executives
The practice of engaging outside firms to handle either individual projects or entire business functions is called downsizing. True or False.
False. That would be outsourcing
The federal government recognizes a sole proprietorship as an independent taxable entity. True or False.
False. The federal government doesn't recognize the company as a taxable entity.
Stock of companies whose earnings tend to track the ups and downs of the economy in a predictable pattern are known as derivative stocks. True or False.
False. This is cyclical stocks
A(n) ______________ is a contract to buy or sell a financial instrument for a set price at a later date.
Financial Future
Socially adept managers will have a knack for ___________.
Finding and building common ground with people of all kinds.
Profits of sole proprietorships ___________.
Flow directly to the owners
A company that is incorporated in one state (frequently the state of Delaware, where incorporation laws are more lenient) but that does business in several other states where it is registered is called a(n)
Foreign corporation
An ___________ enables the buyer to use a larger company's trade name and sell its goods or services in a specific terrirorty.
Franchise
A major advantage of partnerships is that they _________.
Have a straightforward income tax structure.
A major advantage of partnerships is that they_____________.
Have a straightforward income tax structure.
Currency futures are used to _______.
Hedge against exchange rate shifts.
Currency futures are used to _______________.
Hedge against exchange rate shifts.
RDS Bank has been making losses for many years now. The company's management wants to continue with the same style of operations, whereas many shareholders demand a change in management. A majority of shareholders unite and vote against the management's wish to sell the company to a larger counterpart subject to pressures from an external buyer. This is an example of a(n).
Hostile Takeover
Which of the following is most likely to encourage entrepreneurship?
Inability to find attractive employment anywhere else.
Stocks that are purchased primarily for dividend payouts rather than capital gains potential are known as _________ stocks.
Income
Stocks that are purchased primarily for dividend payouts rather than capital gains potential are known as __________ stocks.
Income
Managerial roles are grouped into three main categories: interpersonal, decisional, and _______________.
Informational
_________________ of leaders include gathering, analyzing, and communicating various materials for the company both internally and externally.
Informational
Providing leadership to employees is an example of a(n) ___________ role of management.
Interpersonal
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
Todd D Morrison is the manager of an advanced research team at LCM Inc. a pharmaceutical company. Todd is keen to introduce process improvements aimed at making the business unit more profitable He also uses innovative leadership methods, such as giving team members greater flexibility and freedom. Todd takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation. Todd Morrison's efforts are an example of __________.
Intrapreneurship
_______________ value is an estimate of what a company is actually worth, independent of other values.
Intrinsic.
Global funds are funds that ____________.
Invest in foreign and U.S. securities.
Which of the following statements is true of the liability of investors in a corporation?
Investor's liability is limited to the amount invested in the corporation.
A small business is defined as a company that __________.
Is independently owned and operated and not dominant in its field
A sole proprietorship ____________.
Is owned by only one person
Edwin runs an antique retail shop that is registered as a sole proprietorship. The liability exposure of Edwin's business ________.
Is unlimited for the business's personal obligations.
Edwin runs an antique retail shop that is registered as a sole proprietorship. The liability exposure of Edwin's business ______________.
Is unlimited for the business's personal obligations.
Which of the following statements is true about intrapreneurship?
It can be risky behavior that may or may not be rewarded.
Which of the following is an advantage of buying into a franchise system?
It comes with an established business system.
A potentially significant disadvantage of a partnership is that _____________.
It has more chances for disagreement and conflict.
Preparing a business plan serves which of the following functions
It helps persuade lenders and investors to finance the business.
Stop order is an order to sell a stock when __________.
It's price falls to a particular point.
_______________ leaders act as advisors and supporters and generally let subordinates chart and adjust their own course toward meeting agreed-upon goals and objectives.
Laissez-faire
Danny leads a team of fifteen programmers. Danny divides the project into independent modules and assigns each programmer a module. Danny tells the employees that they are responsible for the completion of the modules and he would assist them only if they need help. Identify the leadership style that Danny is following.
Laissez-faire leadership
A _______________ occurs when someone purchases a company's publicly-traded stock primarily by using borrowed funds, sometimes using the target company's assets as collateral for these loans.
Leveraged buyout
You ask your brother to buy 500 shares of Microsoft, if it is available, at a price less than or equal to $26. This is an example of a __________ order.
Limit
A _____________ is a partnership in which each partner has unrestricted accountability only for his or her own actions and at least some degree of responsibility for the partnership as a whole.
Limited Liability Partnership
Norbon Securities is a financial intermediary. The firm facilities the sale of mutual funds and charges commission when selling mutual funds to investors. This commission is referred to as _____________.
Load
R&M Group, a consumer products company based in Libya, conducted a market research. The research indicated that there was a lack of branded soft drinks in the market, even though there were several local soft-drink manufacturers. The company purchased the right to produce and distribute soft drinks of Fizzpop Inc. (a leading U.S. based soft-drinks firm) R&M Group also sources the supplies from Fizzpop Inc. to ensure that the taste of the product remains the same. In this scenario, which of the following business methods does R&M Group use?
Manufacturing Franchise
In order to be effective, a business goal should be ___________.
Measureable
Gordon Fiber is a firm that manufactures fiber products. The firm is facing a credit crunch and wants to liquidize the treasury bills and commercial papers they have. The firm can sell these at the _______ market.
Money
Gordon Fiber is a firm that manufactures fiber products. The firm is facing a credit crunch and wants to liquidize the treasury bills and commercial papers they have. The firm can sell these at the ___________ market.
Money
___________ is an over-the-counter marketplace for short-term debt instruments such as Treasury bill and commercial papers.
Money Market
_______________ is an over-the-counter marketplace for short-term debt instruments such as Treasury bills and commercial papers.
Money market
Bear market is a market situation in which ____________.
Most stocks are declining in value.
Which of the following statements is true of bond markets?
Most trading is done over the counter in a bond market.
Bonds issued by states, cities, and various government agencies to fund public projects are known as _________.
Municipal bonds.
A(n) ______________ is a specific, short range target or aim.
Objective
A(n) ____________ is the purchased right, but not the obligation, to buy or sell a specified number of shares of a stock or other security at a predetermined price during a specified period.
Option
The amount of money that the bond buyer is lending to the bond issuer is known as the ________
Par value
Stocks that sell for less than one dollar per share or stocks that are highly speculative are called __________ stocks.
Penny
_____________ refers to shares of ownership without voting rights but with defined dividends.
Preferred Stock
Josephine would like to invest part of her individual retirement account (IRA) in the stock market, but she wants to minimize the risk as much as possible. Which of the following is the most suitable investment alternative for Josephine?
Preferred stock.
A put option is purchased when the buyer believes that the _____________.
Price of the underlying stock will decrease.
Which of the following is a key difference between private corporations and public corporations?
Private corporations are owned by a few people, whereas public corporations can be owned by anyone who has the means to buy stake.
A car dealer in Ohio has the rights to sell trademarked automobiles manufactured by Armadillo Motors Inc., which does not have a distribution network in Ohio. The car dealer purchases the automobiles from Armadillo Motors Inc. and then resells them in Ohio. Which of the following models does the dealer use?
Product franchise
A business plan is a written document that summarizes the ____________.
Proposed business venture, goals, and plans for achieving those goals.
In a ______________, the raider launches a public relations battle for shareholder votes, hoping to enlist enough votes to oust the board and management.
Proxy fight.
In a ________________, the raider launches a public relations battle for shareholder votes, hoping to enlist enough votes to oust the board and management.
Proxy fight. This is when the raider launches a public relations battle for shareholders votes.
With a zero-coupon bond, the _________.
Purchaser buys the bond at a discount from the face value.
With a zero-coupon bond, the ________________.
Purchaser buys the bond at a discount from the face value.
The board of directors are _________.
Representatives of the shareholders
A call provision allows the issuer to _________.
Repurchase the bond before maturity.
Companies attempt to increase the market valuation of a share by __________.
Repurchasing some of the shares through a stock buyback.
Which of the following is the most important purpose of issuing a stop order?
Restricting the possible losses an investor is likely to incur.
A group of college graduates starts a business. They want to give their business a structure such that their sick is limited to the amount they have invested in the business. They also want to avoid double taxation of the income that they generate from the business. Which of the following structures is most suitable to satisfy these wants?
S corporation
RS Bank introduces a mutual fund that is designed to invest only in the telecom sector. This mutual fund is an example of a(n) ______.
Sector Fund
At the federal level, small businesses can apply for loans backed by the ________.
Small Business Administration
SCORE is a resource partner of the ______________.
Small Business Administration
Robert owns three restaurants in Atlanta. He pays taxes for the income from the restaurants as his personal income. Roberts business is an example of a ________.
Sole Proprietorship
In your portfolio, you own 450 shares of General Electric. The company announces that each share of stock is being divided into three new shares, so you now own 1,350 shares. This is known as a stock _________.
Split
The criteria against which performance is measured are referred to as __________.
Standards
Short selling refers to selling _______.
Stock borrowed from a broker.
JSE Limited is a South African organization that facilitates exchange of equities between investors. JSE Limited is a(n):
Stock exchange
JSE Limited is a South African organization that facilitates exchange of equities between investors. JSE Limited is a(n) ____________.
Stock exchange.
_____________ plans outline the firm's long-range (often two or five years) organizational goals and set a course of action the firm will pursue to reach its goals.
Strategic
Carton Life is an insurance firm. The firm wants to enter an Asian country that recently removed protectionist barriers in the insurance industry. The company wants to tenter the country with the help of a local firm. However, the company does not want to permanently integrate with another firm. Which of the following arrangements is most suited for this company?
Strategic alliance. Allows the companies to collaborate without formally combining.
A corporation primarily or wholly owned by another company is known as a(n) __________.
Subsidary
The overall plan might be supported at the next level down by such plans as research and development plan, manufacturing plan, and marketing plan. Such functional plans are called ____________ plans.
Tactical
Which of the following is true about creating a new, independent business?
The customer base must be built from the ground up.
Which of the following statements is true regarding the failure rates of new businesses?
The failure rate of a new business is usually high during the first year.
Which of the following statements is true regarding the failure rates of new businesses?
The failure rate of new businesses is usually high during the first year.
Which of the following statements is true about venture capitalists?
They are extremely focused and selective while investing in companies.
Alfa Knowledge is a knowledge management firm. The company helps organizations document and manage internal knowledge. The company has operations in seventeen countries. The demand for Alfa's products has been shrinking in recent times. This is considered a(n) ___________ for the company.
Threat
One of the general characteristics of a small business is that it typically sells fewer products
To fewer market segments.
One of the general characteristics of a small business is that it typically sells fewer products _______.
To fewer market segments.
Which of the following is the basic premise of a derivative?
Transferring risk from one party to another.
_____________ refer to short-term debt securities issued by the federal government.
Treasury Bills
_____________ refer to debt securities issued by the federal government that are repaid more than 10 years after issuance.
Treasury Bonds
__________ refer to debt securities issued by the federal government that are repaid within 1 to 10 years after issuance.
Treasury notes.
____________ refer to debt securities issued by the federal government that are repaid within 1 to 10 years after issuance.
Treasury notes.
A 12-employee executive recruiting firm making 750,000 per year would be a small business.
True
A business plan summarizes the proposed business venture, goals, and plans for achieving those goals. True or False.
True
A company's price/ earnings ratio is determined by dividing the market value per share by the earnings per shares. True or False.
True
A corporation is a legal entity distinct from the persons running the corporation.
True
A corporation is a legal entity distinct from the persons running the corporation. True or False.
True
A mentor is usually an experienced manager or employee who can help guide other managers and employees. True or False.
True
All partners have joint authority to make decisions for the firm in a general partnership. True or False
True
All partners have joint authority to make decisions for the firm in a general partnership. True or False.
True
Among all firms that apply for U.S. patents on new inventions, small businesses receive 13 more patents per employee than larger firms.
True
Among all firms that apply for U.S. patents on new inventions, small businesses receive 13 times more patents per employee than larger firms. True or False
True
An advisory board is a form of "group mentoring" in which you assemble a team of people with subject-area expertise or vital contacts to help review plans and decisions. True or False.
True
Balanced Funds refer to funds that invest in a combination of stocks and bonds. True or False.
True
Baskin-Robbins gives its franchises the right to resell its trademarked goods that must be purchased from Baskin-Robbins. This is an example of a product franchise. True or False.
True
Board of directors has the responsibility for the overall direction of the company and the selection of top executives. True of False.
True
Establishing a corporation is more complicated and expensive compared to establishing a sole proprietorship
True
Establishing a corporation is more complicated and expensive compared to establishing a sole proprietorship. True or False
True
Government agencies require publicly traded companies to publish extensive and detailed financial reports. True or False.
True
High-level managers rely heavily on subordinates to collect, analyze, and summarize information. True or False.
True
In large organizations, mechanisms put in place to prevent mistakes can also hamper innovative thinking by restricting people to tried and true methods. True or False
True
In large organizations, mechanisms put in place to prevent mistakes can also hamper innovative thinking by restricting people to tried-and-true methods. True or False.
True
Leading is the process of influencing and motivating people to work willingly and effectively toward common goals. True or False.
True
Leading is the process of influencing and motivating people to work willingly and effectively toward common goals. True or false.
True
Liquidity is a measure of how easily and quickly an asset can be converted into cash.
True
Most trading in the bond market occurs over the counter and takes place outside organized exchanges. True or False.
True
Setting the prices of new products is a fairly routine decision that managers make. True or False.
True
Standards refer to the criteria against which performance is measured. True or False.
True
Suppliers are future contracts to protect themselves from future price decreases. True or False.
True
The executive dashboard is a tool that provides quick-read summaries of vital performance variables. True or False.
True
The first infusion of capital that a business receives is called seed money. True or False.
True
The government agencies require publicly traded companies to publish extensive and detailed financial reports. True or False.
True
The loans themselves are not transferred when a credit default swap is performed. True or False.
True
Treasury notes are debt securities issued by the federal government that are repaid within 1 to 1 0 years after issuance. True or False.
True
When companies go public, they put out an IPO, or independent public offering. True or False
True
With a zero-coupon bond the purchaser buys the bond at a discount from the face value. True or False.
True
A horizontal merger occurs when different companies at the same stage or level merge together. True or False.
True.
Which of the following is a key difference between a corporation and a sole proprietorship?
Unlike a sole proprietorship, a corporation is subject to limited liability.
Major difference between banks and venture capitalist as categories of private financing
Unlike banks which only provide money venture capitalists also provide management expertise.
An electric appliance marketing company merges with one of its suppliers to form a larger company. This is an example of a ________ merger.
Vertical.
Albama Associates is a consulting firm owned by a few entrepreneurs. Rogo Consulting, a large consulting firm, tries to buy shares fromsome of the shareholders of Albama to obtain control of the company without making a formal acquisition proposal with the management. Albama's management invites a third party to acquire the company to prevent a hostile takeover by Rogo Consulting. This approach used by Albama to prevent hostile takeover is an example of a ______.
White Knight Tactic
Albama Associates is a consulting firm owned by a few entrepreneurs. Rogo consulting, a large consulting firm, tries to buy shares from some of the shareholders of Albama to obtain control of the company without making a formal acquisition proposal with the management. Albama's management invites a third party to acquire the company to prevent a hostile takeover by Rogo Consulting. This approach used by Albama to prevent hostile takeover is an example of a ___________.
White Knight Tactic
With the _______, a third company is invited to acquire a company that is in danger of being swallowed up in a hostile takeover.
White Knight Tactic
A public corporation refers to a corporation _____________.
Whose stock is sold to general people
A public corporation refers to a corporation _____________.
Whose stock is sold to general people.
An advisory board differs from a corporate board of directors because
You don't have to incorporate to establish an advisory board.
An advisory board differs from a corporate board of directors, because__________.
You don't have to incorporate to establish an advisory board.
Three factors contributing to the increased number of small businesses are technologies such as e-commerce, growing diversity in entrepreneurship and
downsizing and outsourcing
A call provision allows the issuer to
repurchase the bond before maturity
Small companies tend to differ from larger ones because _________.
they can react to market changes and make decisions more quickly than larger companies
Corporate officers are the __________.
top executives who run a corporation
Treasury bills are sold at a discount and redeemed at face value. True or false.
true