ETS MAJOR FIELD TEST MBA LATEST
2025 ACTUAL EXAM AND PRACTICE
EXAM QUESTIONS AND DETAILED
CORRECT ANSWERS | A+ GRADE
STUDY GUIDE
On May 31, Company O's general ledger shows a cash
balance of $5,123. The May 31 bank statement shows a
balance of $4,905. Other information is available as
follows:
1. A May 31 deposit of $300 does not appear on the bank
statement; but a $3 service charge does.
2. A customer's $40 insufficient funds check has been
returned with the bank statement.
3. Outstanding checks of $10, $15, and $100 are identified
on May
What is the correct cash balance on May 31?
(A) $4,905
(B) $5,080
(C) $5,166
(D) $5,204 Correct Answer (B) $5,080
Cash Balance 5,123.00
Service charge (3.00)
NSF Check from customer (40.00)
Correct cash balance 5,080.00
,Within the context of the capital asset pricing model
(CAPM), the risk measure known as beta is often
computed by regressing the return of the company's stock
against the
(A) return on the company's bonds
(B) return on the market portfolio
(C) change in the gross domestic product
(D) change in the consumer price index Correct Answer
(B) return on the market portfolio
A project consists of 150 jobs. The expected completion
time for each job is given in days. The project has three
critical paths with two jobs in common, J and K. In order to
finish the project one day early, the completion time
should be reduced one day for
(A) each of the 150 jobs
(B) each of the jobs on the three critical paths
(C) either Job J or Job K
(D) both Job J and Job K Correct Answer (C) either Job J
or Job K
The Organization of the Petroleum Exporting Countries
(OPEC) reduces production by 10 percent, and the growth
rate of the world economy begins to escalate. How will the
simultaneous occurrence of these events affect the
equilibrium price and quantity in the world petroleum
market?
,(A) Price will increase, but quantity will remain unchanged.
(B) Price will increase, but quantity is indeterminate.
(C) Quantity will increase, but price is indeterminate.
(D) Both price and quantity will increase. Correct Answer
(B) Price will increase, but quantity is indeterminate.
Which of the following would most likely occur as a result
of the United States government's imposing tariffs on
foreign steel imports?
(A) The price of steel produced in the United States would
decrease.
(B) The price of imported steel in the United States would
decrease. (C) Employment in the United States steel
industry would increase. (D) Government tax revenue
would fall. Correct Answer (C) Employment in the United
States steel industry would increase.
In an economy the unemployment rate is 10 percent and
the inflation rate is 1 percent. An appropriate fiscal policy
in this phase of the business cycle would be to
(A) increase government spending
(B) increase income taxes
(C) decrease transfer payments
(D) decrease the money supply Correct Answer (A)
increase government spending
Which of the following is an appropriate Federal Reserve
action to stimulate the United States economy?
, (A) Selling government bonds on the open market
(B) Increasing the discount rate
(C) Reducing the reserve requirement
(D) Cutting taxes Correct Answer (C) Reducing the
reserve requirement
If the spread between the spot and forward exchange
rates of two currencies equals the interest rate difference
between the two countries, this phenomenon is referred to
as
(A) purchasing-power equality
(B) commodity arbitrage
(C) currency hedging
(D) interest-rate parity Correct Answer (D) interest-rate
parity
A firm that would like to know whether it has enough cash
to meet its bills would be most likely to use which category
of financial ratio?
(A) Liquidity
(B) Leverage
(C) Efficiency
(D) Profitability Correct Answer (A) Liquidity
In a period of rising prices, which inventory valuation
method would generally yield both the lowest ending
inventory value and the lowest net income figure?
(A) First in, first out (FIFO)
2025 ACTUAL EXAM AND PRACTICE
EXAM QUESTIONS AND DETAILED
CORRECT ANSWERS | A+ GRADE
STUDY GUIDE
On May 31, Company O's general ledger shows a cash
balance of $5,123. The May 31 bank statement shows a
balance of $4,905. Other information is available as
follows:
1. A May 31 deposit of $300 does not appear on the bank
statement; but a $3 service charge does.
2. A customer's $40 insufficient funds check has been
returned with the bank statement.
3. Outstanding checks of $10, $15, and $100 are identified
on May
What is the correct cash balance on May 31?
(A) $4,905
(B) $5,080
(C) $5,166
(D) $5,204 Correct Answer (B) $5,080
Cash Balance 5,123.00
Service charge (3.00)
NSF Check from customer (40.00)
Correct cash balance 5,080.00
,Within the context of the capital asset pricing model
(CAPM), the risk measure known as beta is often
computed by regressing the return of the company's stock
against the
(A) return on the company's bonds
(B) return on the market portfolio
(C) change in the gross domestic product
(D) change in the consumer price index Correct Answer
(B) return on the market portfolio
A project consists of 150 jobs. The expected completion
time for each job is given in days. The project has three
critical paths with two jobs in common, J and K. In order to
finish the project one day early, the completion time
should be reduced one day for
(A) each of the 150 jobs
(B) each of the jobs on the three critical paths
(C) either Job J or Job K
(D) both Job J and Job K Correct Answer (C) either Job J
or Job K
The Organization of the Petroleum Exporting Countries
(OPEC) reduces production by 10 percent, and the growth
rate of the world economy begins to escalate. How will the
simultaneous occurrence of these events affect the
equilibrium price and quantity in the world petroleum
market?
,(A) Price will increase, but quantity will remain unchanged.
(B) Price will increase, but quantity is indeterminate.
(C) Quantity will increase, but price is indeterminate.
(D) Both price and quantity will increase. Correct Answer
(B) Price will increase, but quantity is indeterminate.
Which of the following would most likely occur as a result
of the United States government's imposing tariffs on
foreign steel imports?
(A) The price of steel produced in the United States would
decrease.
(B) The price of imported steel in the United States would
decrease. (C) Employment in the United States steel
industry would increase. (D) Government tax revenue
would fall. Correct Answer (C) Employment in the United
States steel industry would increase.
In an economy the unemployment rate is 10 percent and
the inflation rate is 1 percent. An appropriate fiscal policy
in this phase of the business cycle would be to
(A) increase government spending
(B) increase income taxes
(C) decrease transfer payments
(D) decrease the money supply Correct Answer (A)
increase government spending
Which of the following is an appropriate Federal Reserve
action to stimulate the United States economy?
, (A) Selling government bonds on the open market
(B) Increasing the discount rate
(C) Reducing the reserve requirement
(D) Cutting taxes Correct Answer (C) Reducing the
reserve requirement
If the spread between the spot and forward exchange
rates of two currencies equals the interest rate difference
between the two countries, this phenomenon is referred to
as
(A) purchasing-power equality
(B) commodity arbitrage
(C) currency hedging
(D) interest-rate parity Correct Answer (D) interest-rate
parity
A firm that would like to know whether it has enough cash
to meet its bills would be most likely to use which category
of financial ratio?
(A) Liquidity
(B) Leverage
(C) Efficiency
(D) Profitability Correct Answer (A) Liquidity
In a period of rising prices, which inventory valuation
method would generally yield both the lowest ending
inventory value and the lowest net income figure?
(A) First in, first out (FIFO)
