MIE Test 2
A government issues a bond backed by its taxing power. This bond is called a ______. A. treasury bond B. general obligation bond C. revenue bond D. municipal bond E. savings bond
B
Which one of the following statements describes a disadvantage of operating a sole proprietorship? A. Sole proprietors are required to get approval from a business partner, boss, or board of directors to change any aspect of their business strategy or tactics. B. Sole proprietorships have fewer financial resources and fewer ways to get additional funds from lenders or investors. C. Sole proprietors have less privacy and generally are required to report everything to others in the business. D. Income tax is a very complex matter for sole proprietorships compared with other forms. E. A sole proprietorship is difficult to establish and requires far more paperwork than do other structures.
B
If a purchaser buys a bond, the interest income received from the bond is referred to as the __________. A. face value B. duration rate C. coupon rate D. yield rate E. credit quality
D
Which of the following is an advantage of corporations? A. Potential for conflict B. Reporting requirements C. Simplicity D. Longevity E. Managerial demands
D
FreshGrow, an organic vegetable market, is not a leader in its industry; is individually owned, managed, and maintained; and has 32 employees. FreshGrow is best described as a ______________. A. franchise B. microlender C. crowdfunder D. small business E. business incubator
D
__________ focuses on establishing strategies and objectives for a company and proposing the best ways to achieve them. A. Controlling B. Organizing C. Coaching D. Planning E. Leading
D
A _____________ is a succinct expression of the philosophies that influence a corporation's decisions and actions. A. SWOT analysis B. goal statement C. vision statement D. mission statement E. value statement
E
A business that is owned by one individual is a __________. A. partnership B. master limited partnership C. sole proprietorship D. corporation E. limited liability company
C
A business with one or more general partners with the same unlimited liability as a sole proprietor is known as a __________. A. limited partnership B. sole proprietorship C. general partnership D. limited liability company E. master limited partnership
A
The amount of money a bond buyer is lending to the bond issuer is called what? A. Face value B. Yield C. Coupon rate D. Market value E. Maturity
A
Which of the following is a way that smaller companies differ from larger companies? A. Some firms are smaller because they do not have plans to grow. B. Smaller businesses do not have freedom to innovate and move quickly. C. Small firms have a narrow focus. D. Small businesses worry about getting by with limited resources. E. As smaller businesses grow larger, they tend to get more efficient and less bureaucratic.
C
Every public corporation is susceptible to a takeover. Which of the following is a defense against unwanted takeovers? A. Joint venture B. Proxy fight C. Poison pill D. Tender offer E. Strategic alliance
C
Federal law now requires that a majority of the directors on the board of a corporation be _______. A. employees in the same industry B. top management of the corporation C. independent D. sole proprietors E. competitors
C
Two businesses coming together to form a single company is known as a(n) __________. A. leveraged buyout B. hostile takeover C. merger D. acquisition E. joint venture
C
When you own a part of or equity in a company, it refers to _____. A. Treasury bills B. bonds C. stock D. ETFs E. mutual funds
C
Which of the following is NOT a major contribution of small businesses? A. They offer employment. B. They introduce novel goods. C. They meet the needs of smaller organizations. D. They add a significant amount of cash into the economy. E. They take risks larger businesses sometimes evade.
C
Which of the following is a disadvantage of corporations? A. Longevity B. Ability to raise capital C. Reporting requirements D. Limited liability E. Liquidity
C
A(n) _________ summarizes an anticipated company project, including the project's objectives and strategies for accomplishing those objectives. A. business plan B. financial plan C. marketing plan D. operations plan E. business incubator
A
Investors who purchase shares of stock in a company are called ________. A. shareholders B. general partners C. board members D. sole proprietors E. limited partners
A
Which one of the following statements is NOT accurate in relation to shareholders and their conduct in a corporation? A. Because shareholders elect the directors, in theory the shareholders are the final governing body of the corporation. B. Because shareholders elect the directors, institutional stockholderslong dash—such as pension funds, insurance companies, mutual funds, religious organizations, and college endowment fundslong dash—have significant impact on the governance of corporations. C. Shareholder activism has become a progressively noticeable issue in corporate governance. D. Even though most do not have any direct participation in firm management, shareholders play a significant role in corporate governance. E. Activist shareholders are becoming better prepared and more classy.
A
______________________ is the optimistic, progressive aspiration to establish lucrative, sustainable business ventures. A. Entrepreneurial spirit B. Business planning C. Crowdfunding D. Intrapreneurship E. Angel investing
A
Which of the following is a characteristic of a general partnership? A. It is a corporation. B. The partners have joint liability for the firm's financial obligations. C. Partnerships do not have to pay taxes, but a corporation does. D. Only one partner can make decisions. E. It is owned by one individual.
B
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? A. Developing forecasts B. Analyzing the competition C. Performing a SWOT analysis D. Developing action plans E. Defining the organization's mission, vision, and values
C
A ________ has unlimited liability, but the various _______ who own the stock face only limited liability. A. sole proprietorship; individuals B. partnership; partners C. corporation; shareholders D. limited partnership; board members E. sole proprietorship; board members
C
What is a disadvantage of operating a sole proprietorship? A. Simplicity B. Single layer of taxation C. Finite life span D. Flexibility and control E.Privacy
C
A short expression of what the business aims to be is known as a(n) ________. A. mission statement B. goal C. objective D. vision statement E. values statement
D
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? A. Address the hopes of each owner, decision-making strategies, and succession and exit strategies. B. A great personal partnership cannot get in the way of successful business partnership. C. Dispute-resolution procedures should be avoided, as they apply to corporations. D. Incorporate a broad and general understanding of what the business association will be to allow for flexibility. E. A partnership agreement should strictly follow only the state laws, as they will drive the business.
A
What is used to determine whether a stock is overvalued or undervalued? A. Price/earnings ratio B. Book value C. Intrinsic value D. Stock buyback rate E. Market value
A
Which of the following represents the methods of coordinating resources in order to achieve a company's objectives? A. Organizing B. Leading C. Controlling D. Planning E. Staffing
A
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 __________. A. general partnership B. limited liability partnership C. master limited partnership D. sole proprietorship E. corporation
B
A ____________ is a declaration of why a company exists and what it intends to achieve for consumers and stakeholders. A. vision statement B. mission statement C. SWOT analysis D. value statement E. goal statement
B
If a stock is selling for $52.50 per share on New York Stock Exchange, it refers to which of these? A. Book value B. Market value C. Face value D. Par value E. Intrinsic value
B
The ________ section of a business plan explains the purpose of the business and what it hopes to accomplish. A. start-up schedule B. mission and objectives C. major risk factors D. company overview E. operations plan
B
Which form of business is also known as a closely held corporation? A. Public corporation B. Private corporation C. Limited liability partnership D. Master limited partnership E. Sole proprietorship
B
Which of the following factors has NOT been shown to lead to an increase in small businesses? A. Social media B. A healthy economy C. Technological advances D. Large-scale downsizing E. Diversity in entrepreneurship
B
Which of the following is a disadvantage of partnerships? A. Longevity B. Potential for conflict C. Single layer of taxation D. Simplicity E. More resources
B
Which of the following leader roles involves offering direction to employees, establishing relationships, and acting as a representative for people both internally and externally? A. Informational role B. Interpersonal role C. Administrative role D. Technical role E. Decisional role
B
Which one of the following statements is NOT an accurate description of corporations? A. The stock of a public corporation is sold to anyone who has the means to buy it. B. Corporations can change from private to public ownership but not from public to private ownership. C. Public corporations are said to be publicly held or publicly traded. D. The stock of a private corporation is not made available for purchase by the public. E. Shareholders of a corporation are investors who can purchase shares of stock.
B
Which one of the following statements is NOT an accurate reflection of the definition and functions of a business plan? A. Business plans can provide a reality check to judge whether the business is feasible. B. A business plan guides company operations and outlines a strategy. C. Business plans are written soon after the company is launched, when the company is seeking funding, and when it is up and running. D. A business plan summarizes a proposed business venture and communicates the company's goals. E. Business plans can help persuade lenders and investors to finance the business.
C
______ 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. A. Face value B. Par value C. Book value D. Intrinsic value E. Market value
C
All of the following are interrelated steps of the "strategic planning process" EXCEPT which one? A. Developing action plans B. Performing a SWOT analysis C. Analyzing the competition D. Networking with people within and outside the organization E. Defining the organization's mission, vision, and values
D
Which one of the following statements is NOT accurate in relation to the responsibilities of the board of directors of a corporation? A. Directors are often paid a combination of an annual fee and stock options, and the right to buy company shares at an advantageous price. B. Boards are typically composed of major shareholders, philanthropists, and executives from other corporations. C. As the representatives of the shareholders, the members of the board of directors are responsible for selecting corporate officers. D. Much of the attention focused on corporate reform in recent years has zeroed in on boards being not too closely allied with management. E. Much of the attention focused on corporate reform in recent years has zeroed in on boards failing to add enough value to strategy planning.
D
Which statement describes the advantage of operating a sole proprietorship? A. An important financial advantage in many sole proprietorships is the opportunity to share costs. B. Sole proprietorships are liquid, which also helps give them a long life span; when shareholders sell or bequeath their shares, ownership simply passes to a new generation, so to speak. C. Sole proprietorships have the ability to pool money by selling shares of stock to outside investors. D. Sole proprietors have more privacy and generally are not required to report anything to anyone. E. In a sole proprietorship, the owner and the business are legally inseparable
D
Which term describes the ability of people to easily and quickly convert their shares into cash by selling them on the open market? A.Longevity B. Potential for conflict C. Limited liability D. Liquidity E. Reporting requirements
D
A(n) _____________ occurs when an individual or a group of people buy a company's publicly traded stock mainly by using borrowed funds. A. hostile takeover B. acquisition C. joint venture D. leveraged buyout E. merger
D
An S corporation is a ________. A. profit-seeking corporation whose charter also requires it to pursue a stated social or environmental goal B. company whose stock is held by few owners and is not available for sale to the public C. corporation whose stock is sold to the general public D. corporation not allowed to sell stock to investors E. corporation allowed to sell stock to a limited number of investors while enjoying the pass-through taxation of a partnership
E
Bonds issued by the U.S. government that are repaid in less than 1 year are called _____. A. savings bonds B. treasury notes C. Treasury Inflation-Protected Securities D. Treasury bonds E. Treasury bills
E
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 ________. A. a purchased existing business comes with proven products or services B. a purchased healthy business comes with an established customer base C. an established business comes with functioning systems D. financing an existing business is much easier E. the potential for a considerable amount of financing
E
If a rating agency determines that a company's finances are deteriorating, what happens to the bonds issued by that company? A. They become zero-coupon bonds. B. The face value is changed. C. They issue a call provision. D. They are defaulted on. E. They are downgraded.
E
Performing the decisional role, managers ________. A. tend to excel at fostering relationships with many people B. risk getting away from day-to-day work C. rely on subordinates to collect, analyze, and summarize information D. spend a fair amount of time gathering information E. decide about setting product prices and selecting employees
E
The informational roles of managers include all of the following EXCEPT which one? A. Managers rely on subordinates to collect, analyze, and summarize information. B. In order to fulfill informational role, managers risk getting away from day-to-day work. C. Managers spend a reasonable amount of time collecting information. D. Managers use technology to keep in touch with information related to their business. E. Effective managers tend to excel at fostering relationships with many people.
E
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? A. Private corporation B. General partnership corporation C. Limited liability corporation D. S corporation E. Benefit corporation
E
Which of the following is a disadvantage of partnerships? A. Simplicity B. Cost sharing C. Single layer of taxation D. More resources E. Unlimited liability
E
Which of the following represent(s) a combination of common stock and corporate bonds characteristics? A. Treasury bonds B. ETFs C. Index funds D. Mutual fund E. Preferred stock
E
"Intrapreneurship" is difficult to implement for all of the following reasons EXCEPT _____________. A. organizations can develop habits based on behaviors B. injecting the entrepreneurial spirit sometimes means going against the accepted wisdom C. mechanisms put in place to prevent mistakes can hamper innovative thinking D. innovative behavior and entrepreneurial spirit can lead to risky behavior E. innovating within a larger organization is often much easier
E