MIE 201 Test 2
Which of the following factors has NOT been shown to lead to an increase in small businesses?
A healthy economy
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?
Address the hopes of each owner, decision-making strategies, and succession and exit strategies.
A(n) _________________________ is a group of individuals with particular knowledge or important connections that assists a company owner with the evaluation of strategies and decision making.
Advisory board
Companies with solid growth potential may seek public funding, which can be secured from ________.
An initial public offering (IPO)
______________ are people who invest very small amounts of personal resources early in a new business's life in the hopes of eventually selling a percentage of the company for a profit.
Angel investors
Which of the following are inclined to regulate decision making and limit the choices of employees?
Autocratic leaders
Which one of the following statements is NOT accurate in relation to shareholders and their conduct in a corporation?
Because shareholders elect the directors, in theory the shareholders play a significant role in corporate governance.
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?
Benefit corporation
______ 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.
Book value
Which of the following provide new businesses with a variety of services—such as counseling and financial support—that a company needs to get under way?
Business incubators
A(n) _________ summarizes an anticipated company project, including the project's objectives and strategies for accomplishing those objectives.
Business plan
Which one of the following statements is NOT an accurate reflection of the definition and functions of a business plan?
Business plans are written soon after the company is launched, when the company is seeking funding, and when it is up and running.
Which of the following focuses on rationalizing, resolving problems, and remembering details in order to comprehend and process the material necessary for decision making?
Cognitive intelligence
__________ involves methods of calculating progression toward objectives and modifying strategies as needed.
Controlling
Which one of the following statements is NOT an accurate description of corporations?
Corporations can change from private to public ownership but not from public to private ownership.
Which one of the following private sources of funding is extremely risky?
Credit cards and personal lines of credit
____________ involves pursuing investment from the public for business ventures, investments, or loans.
Crowdfunding
Which of the following would a multinational firm use to protect itself against changes in the value of exchange rates?
Currency futures
Contracts whose worth is derived from an asset of some kind are called _____.
Derivatives
The informational roles of managers include all of the following EXCEPT which one?
Effective managers tend to excel at fostering relationships with many people.
______________________ is the optimistic, progressive aspiration to establish lucrative, sustainable business ventures.
Entrepreneurial spirit
What type of mutual fund is purchased or sold on a public stock exchange?
Exchange-traded funds
Which section of the plan should address how investors can cash out or sell their investment?
Exit strategy
The amount of money a bond buyer is lending to the bond issuer is called what?
Face value
If you have a legally binding contract to buy a financial instrument for a set price 3 months from today, it is called _______.
Financial futures
What is a disadvantage of operating a sole proprietorship?
Finite life span
______________ supervise employees and fulfill the strategies established throughout other levels of management.
First-line managers
A(n) ____________ is an agreement in which an entity acquires permission to retail goods and utilize certain features of another business's structure.
Franchise
A government issues a bond backed by its taxing power. This bond is called a ______.
General obligation bond
Which term defines the action when derivatives are utilized to safeguard profits against an unexpected loss?
Hedging
Which of the following is not a common category of private financing?
IPO
In order to improve the chances of success when the organization needs to change, managers can follow all of the steps listed below EXCEPT which one?
Ignore the ripple effect the change will have throughout the organization.
If investors were seeking a mutual fund that paid high dividends and interest, what type of fund would they seek?
Income funds
Federal law now requires that a majority of the directors on the board of a corporation be _______.
Independent
Which of the following is a firm's original presentation of the availability of stocks for purchase?
Initial public offering
"Intrapreneurship" is difficult to implement for all of the following reasons EXCEPT _____________.
Innovating within a larger organization is much easier
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
Which of the following are skills necessary to comprehend individuals and to work together successfully with others?
Interpersonal skills
Which of the following have a tendency to give employees the freedom of making decisions, especially decisions regarding everyday matters?
Laissez-faire leaders
__________ represents the practice of directing and inspiring individuals to successfully work toward company objectives.
Leading
A(n) _____________ occurs when an individual or a group of people buy a company's publicly traded stock mainly by using borrowed funds.
Leveraged buyout
Which term describes the ability of people to easily and quickly convert their shares into cash by selling them on the open market?
Liquidity
Which of the following is an advantage of corporations?
Longevity
If a stock is selling for $52.50 per share on New York Stock Exchange, it refers to which of these?
Market value
Two businesses coming together to form a single company is known as a(n) __________.
Merger
______________ represent establishments that offer minor quantities of capital to company owners who might not be eligible for conventional loans.
Microlenders
___________ are typically responsible for establishing objectives, fulfilling goals, and organizing work for other levels of management.
Middle managers
The ________ section of a business plan explains the purpose of the business and what it hopes to accomplish.
Mission and objectives
A ____________ is a declaration of why a company exists and what it intends to achieve for consumers and stakeholders.
Mission statement
When seeking to sell short-term debt instruments, what market would be most useful?
Money market
Which one of the following statements is NOT accurate in relation to the responsibilities of the board of directors of a corporation?
Much of the attention focused on corporate reform in recent years has zeroed in on boards being not too closely allied with management.
Which of these represent(s) a financial instrument that brings money from various different people to buy a diversified mix of stocks, bonds, or other securities?
Mutual fund
Which of the following is a computerized stock exchange?
NASDAQ
All of the following are interrelated steps of the "strategic planning process" EXCEPT which one?
Networking with people within and outside the organization
Which mutual funds do not charge a sales commission during either purchase time or selling time?
No-load
Many cities and states have a(n) ____________ that helps companies succeed and contribute to the local or regional economy, specifically.
Office of economic development
Which term defines the acquired right to purchase a particular number of shares of a stock at a fixed price during a specified period?
Option
Which of the following represents the methods of coordinating resources in order to achieve a company's objectives?
Organizing
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?
Performing a SWOT analysis
__________ focuses on establishing strategies and objectives for a company and proposing the best ways to achieve them.
Planning
Every public corporation is susceptible to a takeover. Which of the following is a defense against unwanted takeovers?
Poison pill
Which of the following is a disadvantage of partnerships?
Potential for conflict
Which of the following represent(s) a combination of common stock and corporate bonds characteristics?
Preferred stock
What is used to determine whether a stock is overvalued or undervalued?
Price/earnings ratio
Which of the following handles the selling of IPOs?
Primary market
Which form of business is also known as a closely held corporation?
Private corporation
Which of the following is a disadvantage of corporations?
Reporting requirements
________________ is the initial collection of resources expended in order to establish a company.
Seed money
Investors who purchase shares of stock in a company are called ________.
Shareholders
Which of the following is a way that smaller companies differ from larger companies?
Small firms have a narrow focus
Which statement describes the advantage of operating a sole proprietorship?
Sole proprietors have more privacy and generally are not required to report anything to anyone
A business that is owned by one individual is a __________.
Sole proprietorship
Which one of the following statements describes a disadvantage of operating a sole proprietorship?
Sole proprietorships have fewer financial resources and fewer ways to get additional funds from lenders or investors.
Which of the following is LEAST likely to coordinate the sale or purchase of bonds?
Stock exchange
When an investor tells his or her broker to sell a stock if the price drops to a particular level, it is called a _______ order.
Stop
____________ represent the capability and knowledge needed to implement the procedures of a specific occupation.
Technical skills
Entrepreneurs can get advice and support from a wide variety of sources EXCEPT __________.
The US Census Bureau
Which of the following is a characteristic of a general partnership?
The partners have joint liability for the firm's financial obligations.
If a rating agency determines that a company's finances are deteriorating, what happens to the bonds issued by that company?
They are downgraded
Which of the following is NOT a major contribution of small businesses?
They meet the needs of smaller organizations
Which of the following statements accurately represents the responsibilities of middle managers in the management pyramid?
They offer very important coaching and mentoring for first-line managers.
Bonds issued by the U.S. government that are repaid in less than 1 year are called _____.
Treasury bills
Which of the following is a disadvantage of partnerships?
Unlimited liability
Which one of the following statements is NOT a true representation of top-level managers in the management pyramid?
Upper-level managers select top managers.
A _____________ is a succinct expression of the philosophies that influence a corporation's decisions and actions.
Value statement
Financiers who offer capital to support start-up companies in order to gain a percentage of ownership, with the goal of eventually turning the company around and selling it for a profit, are called ____________.
Venture capitalists
A short expression of what the business aims to be is known as a(n) ________.
Vision statement
If a purchaser buys a bond, the interest income received from the bond is referred to as the __________.
Yield rate
When Joanna compares her company's key performance features with those of industry front-runners, she is ____________.
benchmarking
An S corporation is a ________.
corporation allowed to sell stock to a limited number of investors while enjoying the pass-through taxation of a partnership
A ________ has unlimited liability, but the various _______ who own the stock face only limited liability.
corporation; shareholders
Performing the decisional role, managers ________.
decide about setting product prices and selecting employees
Allowing employees some authority and including them in decision-making activities is characteristic of ____________.
democratic leaders
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 __________.
limited liability partnership (LLP)
A business with one or more general partners with the same unlimited liability as a sole proprietor is known as a __________.
limited partnership
When a mutual fund charges a sales commission during purchase time, selling time, or both, it is called a(n) _____ fund.
load
When you own a part of or equity in a company, it refers to _____.
stock
Laissez-faire leaders take the role of ________.
supporters and consultants, encouraging employees' ideas and proposing insights when asked
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 ________.
the potential for a considerable amount of financing