ETS MAJOR FIELD TEST (PRACTICE TEST): BACHELOR'S
DEGREE IN BUSINESS QUESTIONS AND ANSWERS
2025/2026
High product differentiation is generally accompanied by
a) higher market share
b) decreased emphasis on competition based on price
c) higher profit margins and lower costs
d) significant economies of scale - ANSWER ->b) decreased emphasis
on competition based on price
The essence of common law is:
a) its prospective nature.
b) the concept of stare decisis
c) its flexibility
d) the plain meaning doctrine - ANSWER ->b) the concept of stare
decisis
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 - ANSWER ->b) Price will
increase, but quantity is indeterminate
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 - ANSWER ->b) return on the
market portfolio
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 - ANSWER ->d) interest-rate parity Douglass
Interiors is considering two mutually exclusive projects and have
determined that the crossover rate for these projects is 11.7
percent. Project A has an internal rate of return (IRR) of 15.3 percent
and Project B has an IRR of 16.5 percent. Given this information,
which one of the following statements is correct?
,a) Project A should be accepted as its IRR is closer to the crossover
point than is Project B's IRR.
b) Project B should be accepted as it has the higher IRR.
c) Both projects should be accepted as both of the project's IRRs
exceed the crossover rate.
d) Neither project should be accepted since both of the project's IRRs
exceed the crossover rate.
e) You cannot determine which project should be accepted given the
information provided. - ANSWER ->e) You cannot determine which
project should be accepted given the information provided.
A small number of people with complementary skills who are
committed to a common purpose, a set of performance goals, and an
approach for which they hold themselves mutually accountable is
referred to as a
a) committee
b) task force
c) group
d) team - ANSWER ->d) team
Manufacturing overhead includes:
a) all direct material, direct labor and administrative costs
, b) all manufacturing costs except direct labor
c) all manufacturing costs except direct labor and direct materials
d) all selling and administrative costs - ANSWER ->c) all manufacturing
costs except direct labor and direct materials
Sue and Neal are twins. Sue invests $5,000 at 7 percent when she is 25
years old. Neal invests $5,000 at 7 percent when he is 30 years old.
Both investments compound interest annually. Both Sue and Neal retire
at age 60. Which one of the following statements is correct assuming
that neither Sue nor Neal has withdrawn any money from their
accounts?
a) Sue will have less money when she retires than Neal.
b) Neal will earn more interest on interest than Sue.
c) Neal will earn more compound interest than Sue.
d) If both Sue and Neal wait to age 70 to retire, then they will have
equal amounts of savings.
e) Sue will have more money than Neal as long as they retire at the
same time - ANSWER ->e) Sue will have more money than
Neal as long as they retire at the same time
A sample of assistant professors on the business faculty at state
supported institutions in Ohio revealed the mean income to be $32,000
DEGREE IN BUSINESS QUESTIONS AND ANSWERS
2025/2026
High product differentiation is generally accompanied by
a) higher market share
b) decreased emphasis on competition based on price
c) higher profit margins and lower costs
d) significant economies of scale - ANSWER ->b) decreased emphasis
on competition based on price
The essence of common law is:
a) its prospective nature.
b) the concept of stare decisis
c) its flexibility
d) the plain meaning doctrine - ANSWER ->b) the concept of stare
decisis
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 - ANSWER ->b) Price will
increase, but quantity is indeterminate
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 - ANSWER ->b) return on the
market portfolio
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 - ANSWER ->d) interest-rate parity Douglass
Interiors is considering two mutually exclusive projects and have
determined that the crossover rate for these projects is 11.7
percent. Project A has an internal rate of return (IRR) of 15.3 percent
and Project B has an IRR of 16.5 percent. Given this information,
which one of the following statements is correct?
,a) Project A should be accepted as its IRR is closer to the crossover
point than is Project B's IRR.
b) Project B should be accepted as it has the higher IRR.
c) Both projects should be accepted as both of the project's IRRs
exceed the crossover rate.
d) Neither project should be accepted since both of the project's IRRs
exceed the crossover rate.
e) You cannot determine which project should be accepted given the
information provided. - ANSWER ->e) You cannot determine which
project should be accepted given the information provided.
A small number of people with complementary skills who are
committed to a common purpose, a set of performance goals, and an
approach for which they hold themselves mutually accountable is
referred to as a
a) committee
b) task force
c) group
d) team - ANSWER ->d) team
Manufacturing overhead includes:
a) all direct material, direct labor and administrative costs
, b) all manufacturing costs except direct labor
c) all manufacturing costs except direct labor and direct materials
d) all selling and administrative costs - ANSWER ->c) all manufacturing
costs except direct labor and direct materials
Sue and Neal are twins. Sue invests $5,000 at 7 percent when she is 25
years old. Neal invests $5,000 at 7 percent when he is 30 years old.
Both investments compound interest annually. Both Sue and Neal retire
at age 60. Which one of the following statements is correct assuming
that neither Sue nor Neal has withdrawn any money from their
accounts?
a) Sue will have less money when she retires than Neal.
b) Neal will earn more interest on interest than Sue.
c) Neal will earn more compound interest than Sue.
d) If both Sue and Neal wait to age 70 to retire, then they will have
equal amounts of savings.
e) Sue will have more money than Neal as long as they retire at the
same time - ANSWER ->e) Sue will have more money than
Neal as long as they retire at the same time
A sample of assistant professors on the business faculty at state
supported institutions in Ohio revealed the mean income to be $32,000
