Exam 4
People who graduate from college can expect to generate _____ more annual income than those earning only a high school diploma.
48.9%
More than _____ percent of individuals in the U.S. age 18 and older use the Internet regularly.
80
_____ involves a centralized database in which data from several databases are consolidated and organized so that they can be easily analyzed.
A data warehouse
Which of the following is not true about savings goals?
About 50% of Americans have a net worth of zero or less
_____ software performs a specific task, such as word processing or spreadsheet creation.
Applications
_____ refers to the science of developing computer systems that can mimic human behavior.
Artificial intelligence
If you're a farmer who needs help clearing his fields and has plenty of food to spare, you might enter into a _____ transaction with a laborer who has time to clear fields but not enough food.
Barter
A(n) _____ market is a period of declining or sluggish stock prices.
Bear market
Treasury _____ mature in one year.
Bills
A(n) _____ is a financial plan that projects cash inflows and outflows over a period of time.
Cash budget
When Pete Peterson took out a small business loan, the bank asked for security in the form of _____.
Collateral
_____ is the most effective method of ensuring that sensitive computer-stored information can't be accessed or altered by unauthorized parties.
Encryption
Since 1868, U.S. courts have used the _____of the Fourteenth Amendment to the Constitution to check a range of potentially discriminatory and unfair actions by governments at every level.
Equal Protection Clause
The principle whereby a dollar received in the present is worth more than a dollar received in the future is called compound interest.
Fals
A budget shows the income received for the past year and the amounts one expects to spend in the next year for each cash outflow item.
False
A data mine is a centralized database in which data from several databases are consolidated and organized so that they can be easily analyzed.
False
A defined benefit plan allows a specified amount of pretax dollars to be used to pay for qualified expenses, including health care and childcare.
False
A potential employer will likely spend ten minutes reviewing your résumé.
False
Cars and boats are appreciable assets.
False
Civil law prohibits and punishes wrongful conduct, such as assault and battery, murder, robbery, extortion, and fraud.
False
Credit bureaus compile a numerical credit score called a FDIO score for each credit user.
False
Equity financing means raising needed capital by selling bonds.
False
For expenditures, if the actual amount is higher than the budgeted amount, the variance is favorable
False
From an entry-level position-usually called analyst-the finance professional may advance to the position of junior analyst.
False
If you are unable to pay your debts, the best thing to do is to change your phone number to avoid collection calls.
False
If you want to start a small business and need a bank loan, your banker will want primarily to see your mission statement.
False
In determining your credit score, the length of your credit history is not nearly as important as the types of credit you use.
False
Information is unprocessed facts; data are information that has been processed.
False
Mike gets 5% interest on his savings, but the inflation rate is 3%. So his rate of return is 8%.
False
Statutory laws are laws enacted by administrative agencies.
False
The chief information officer is in charge of collecting appropriate data.
False
The good thing about laws is that they can be written to take care of all contingencies that arise during the course of life.
False
The rate of interest that the Fed charges member banks is called the market rate.
False
The rate that banks charge their best customers is called the maturity rate.
False
When a family member loans money to start up a business, he or she should not insult the borrower by drawing up a formal loan agreement.
False
Your online activities can be intercepted by a practice called privacy theft.
False
When investors look at the overall quality of a company, all of the following are among the basic questions that they ask except.
How much capital does it take in each year?
_____ consists of data that have been processed or turned into some useful form.
Information
Which of the following is true about the NASDAQ (National Association of Securities Dealers Automated Quotations)?
It is the best known electronic exchange system.
The government tracks the money supply by calculating _____, which includes the most liquid forms of money.
M-1
_____ funds pay interest to investors who have pooled funds to make short-term loan to businesses and government bodies.
Money market mutual
_____ is a law enacted by legislative branches of government, such as the U.S. Congress.
Statutory law
Which of the following is not true about subprime loans?
They are generally issued at an adjustable rate.
A business gets _____ credits from its suppliers.
Trade
A market index is a measure for tracking stock prices.
True
A technology called electronic data interchange helps a business to process transactions and transmit purchasing documents directly from one IS to another.
True
A virtual company has no significant physical presence.
True
After serving in Congress, George McGovern ran a successful hotel in Stratford, Connecticut.
True
Amortization is the schedule by which you'll reduce the balance of your debt.
True
An enterprise resource planning system channels information to multiple users.
True
Client-server systems include a number of client machines and a server.
True
Collateral is something that you pledge in order to guarantee repayment of a loan.
True
Consuela Alvarez is an information system (IS) manager for Metro Hospital, a major medical facility specializing in the care of infants and children. She supervises a total of ten people in processing the hospital's information needs. She works long hours and always receives an "excellent" rating from upper management. Alvarez has worked for Metro in this capacity for six years and is quite happy with her job. If she's interested in discovering previously unknown relationships between the general behavior of her customers and that of certain groups of them, Alvarez will probably turn to data mining.
True
Generally, financial needs peak somewhere in stage 2, at approximately age fifty-five, or ten years before typical retirement age.
True
If a LuLu's Diner employee spills scalding hot coffee on a customer causing third degree burns, the owner of LuLu's Diner is held responsible for the employee's actions.
True
If a product sold on the market fails to meet legal standards, the company might be considered to be negligent per se.
True
If you direct outrageous conduct at someone and that person suffers extreme emotional pain as a result, you may be held liable for intentional infliction of emotional distress.
True
In entrepreneurship as in most other walks of adult life, the better your education, the more promising your financial future.
True
In order to get a high credit score, you need to use credit sensibly.
True
Insurance pays an income to an insured person when he or she is unable to work for an extended period of time.
True
Life stages and events play a big part in the determination of financial planning.
True
Operations support systems, such as transaction processing systems, are generally used by managers at lower levels of an organization.
True
Privately held for 18 years, Superior Chemicals Inc. has finally decided to go public. The owners are in the process of deciding whether to use debt or equity financing to finance growth after the initial public offering. Buyers of Superior preferred stock will enjoy safer investments but not the upside potential of investment in the company's common stock.
True
Product-liability lawsuits against businesses that sell "unreasonably dangerous" products went up a hundredfold between 1950 and 2001, to a total of $205 billion.
True
Stockholders' equity is the amount invested in a business by its owners.
True
The DJIA (Dow Jones Industrial Average) is the total value of a "market basket" of 30 large companies headquartered in the United States.
True
Whenever you use credit, those you borrow from provide information on your debt and payment habits to three national credit bureaus.
True
Which of the following questions would you not ask yourself if you were engaging in financial planning?
Would I have been better off if I had purchased a car rather than leased it?
An employee's actions fall within the scope of his employment if _____.
both a and b
With _____, the interest earned on your savings is added to the money in your savings account, and the new total (principle plus interest) earns more interest.
compound interest
The financial crisis that began in 2006-2007 in the banking industry as a result of the subprime mortgage crisis caused all of the following problems except:
consumer confidence remained strong.
A firm's _____ system consists of the combination of technologies, procedures, and people who collect and distribute the information needed to make decisions and coordinate and control companywide activities.
data flow system
By _____ its customer-based data warehouse, a firm can discover previously unknown relationships between customers in general and certain groups of customers.
data-mining
A(n) _____ is a form of retirement savings plan in which the employee contributes money each pay period to his or her retirement account and the employer matches a portion of the contribution.
defined contribution plan
You and a friend want to open new pet-grooming and pet-services shop. Once established, you intend to open a second store in a larger town 20 miles away. If store number two is a success, you plan to start franchising your company. Besides calculating the amount of funds that your business needs for a specified period of time, your financial plan should include a(n) _____.
detailed strategy for getting needed funds
The process of raising capital though the sale of a company's stock is called _____ financing.
equity
In a budget, a(n) _________ occurs when the actual amount of an expenditure is less than the budgeted amount
favorable variance
Just about everybody is familiar with the amazing success that eBay has enjoyed during the last few years. It's spawned eBay stores across the country, and executives plan to roll out more creative business practices in the near future. eBay is concerned about all of the following forms of data security except _____.
firewall duplication
After sending a résumé and cover letter to the company for the job you want, the next thing to do is to:
follow up to see if your materials got to the right place and offer additional information.
A big advantage of a credit card is
it helps you build credit
Laws ensuring such rights as freedom of speech and religion are meant to _____.
maximize individual freedom
Money serves all of the following basic functions except _____.
medium of barter
At Calibration Industries Ltd., _____ managers need information to help them allocate resources and oversee the activities under their control.
middle
All of the following are among the Fed's three major goals except _____.
money insurance
When home buyers couldn't make their house payments, _____ plummeted in value.
mortgage-backed securities
Your _____ is the difference between your assets and your liabilities.
net worth
Credit cards _____.
often allow cash advances
As an information technology manager, Caroline Clayton often works with _____ control technology to monitor and control physical processes.
process
The first step in getting a job offer is to prepare a(an) _____.
résumé
A(n) _____ is the most commonly used encryption system for transmitting data over the Internet.
secure sockets layer
Jose is starting a Mexican restaurant. He plans to borrow money to buy a building to house the restaurant. Which of the following will Jose most likely use to finance the building:
secured long-term bank loan
Just about everybody is familiar with the amazing success that eBay has enjoyed during the last few years. It's spawned eBay stores across the country, and executives plan to roll out more creative business practices in the near future. In considering what to do about malicious programs, eBay managers will be concerned about all of the following except _____.
snakes
Of the following, only ____ data are considered external data.
syndicated services
The main problem with an adjustable rate mortgage (ARM) is _____.
they make planning and budgeting difficult because you don't know when the rate will change
Most of a business's daily activities are recorded and processed by its _____ system, which receives input data and converts them into information intended for various users.
transaction processing
Input data are called _____, which are events that affect a business.
transactions
Quite simply, data are _____ facts.
unprocessed
A third party firm may supply a private system called a(n) _____ network, over which it may conduct a variety of transactions.
value-added network
By establishing itself as a _____ company, the CD Internet retailer Spun.com avoided carrying $8 million in inventory that it would otherwise have needed to support its sales.
virtual
About 10 years ago you founded an energy company that operates as a privately-held corporation with only limited stock ownership. You are considering selling stock to the public for the first time through an initial public offering. All of the following are disadvantages for taking a company public except:
you would get an influx of cash that doesn't have to be paid back.
