ETS MBA Exam Terms Questions and
Answers
acid-test ratio - Correct Answers -the ratio of current assets and current liabilities (aka
quick rato). the ratio shows how well a business is able to cover its short-term
obligations (liquidity).
action-centered leadership (john adair's model) - Correct Answers -represents 3 key
balanced activities - achieving the task, building and maintaining the team, and
developing the individual.
the key is balance because if not eqully weighed the model is ineffective.
leaders who spend time managing each of these elements will likely be more successful
than those who focus on only one.
activity-based costing (ABC) - Correct Answers -accounting system that recognizes a
business firm's relationship between costs, activities and products, and through this
relationship assign indirect costs to products less arbitrarily than traditional methods.
actual cash value - Correct Answers -the amount of money, less depreciations, that it
would cost to replace something damaged beyond repair with a comparable item.
advanced planning and scheduling software (APS) - Correct Answers -a type of system
that tracks costs based on the activities that are responsible for driving costs in the
production of manufactured goods.
allocates raw materials and production capacity optimally to balance demand and plant
capacity.
project teams can maximize their efficiency and lower their production costs, know
whether or not they need to order more supplies.
adverse selection - Correct Answers -the theory that poor quality goods are more likely
to sell than good ones because some sellers want to get rid of products, and the buyers
are unable to judge whether the quality or price are too low.
sellers are at an advantage because they have information about the product's quality
that buyers don't.
i.e., purchasing a piece of equipment that will be phased out and therefor the parts will
no longer be available.
affiliative leadership - Correct Answers -leadership style focusing on renewing a sense
of kinship and building trust among various factions whose cooperation is desirable for
promoting the goals of the organization.
these leaders tend to adopt an empathetic approach.
, in an effort to appease people and help them realize their true potential, there is a
danger that the goals of the organization will be side tracked and poor performances will
go unchecked.
competitive strategies - Correct Answers -differentiation, cost leadership, focus
broad differentiation strategy - Correct Answers -strategy where a business seeks to
differentiate its products or services from their competitors in ways that attract the
broadcast spectrum of customers in an established industry.
i.e., BMW and Apple
low-cost strategy - Correct Answers -entails the process of appealing to the broad
spectrum of potential buyers by being able to offer an overall low cost product or
service.
i.e., target and wal-mart
best-cost strategy - Correct Answers -entails the process of appealing to the broad
spectrum of potential buyers by being able to offer an overall low cost product or
service.
i.e., Ford with its Lincoln luxury models
a focused strategy on lower costs - Correct Answers -a brand positioning strategy that
concentrates on out competing rivals by offering customized products or services at a
lower cost to a smaller portion of the established buyers.
i.e., small retailers offering their own label or discounted line of products.
agile manufacturing - Correct Answers -flexible manufacturing practices utilizing
processes, tools and training to meet the demands of customers by turning speed and
agility into a key competitive advantage.
a company using this is in a much better position to take advantage of short windows of
opportunity and fast changes in customer demand.
alpha rating - Correct Answers -the return a security or portfolio would be expected to
earn if the market's rate of return was zero.
0.5 means that the stock/trust would outperform the market-based return by 0.5%.
anti-trust laws - Correct Answers -laws that prevent monopolies and promote
competition and fairness.
ask - Correct Answers -the net asset value of a mutual fund plus any sales charges.
asymmetric information - Correct Answers -information that differs between parties;
results in situation where consumers, suppliers, and producers do not have the same
information for which to base decisions on.
Answers
acid-test ratio - Correct Answers -the ratio of current assets and current liabilities (aka
quick rato). the ratio shows how well a business is able to cover its short-term
obligations (liquidity).
action-centered leadership (john adair's model) - Correct Answers -represents 3 key
balanced activities - achieving the task, building and maintaining the team, and
developing the individual.
the key is balance because if not eqully weighed the model is ineffective.
leaders who spend time managing each of these elements will likely be more successful
than those who focus on only one.
activity-based costing (ABC) - Correct Answers -accounting system that recognizes a
business firm's relationship between costs, activities and products, and through this
relationship assign indirect costs to products less arbitrarily than traditional methods.
actual cash value - Correct Answers -the amount of money, less depreciations, that it
would cost to replace something damaged beyond repair with a comparable item.
advanced planning and scheduling software (APS) - Correct Answers -a type of system
that tracks costs based on the activities that are responsible for driving costs in the
production of manufactured goods.
allocates raw materials and production capacity optimally to balance demand and plant
capacity.
project teams can maximize their efficiency and lower their production costs, know
whether or not they need to order more supplies.
adverse selection - Correct Answers -the theory that poor quality goods are more likely
to sell than good ones because some sellers want to get rid of products, and the buyers
are unable to judge whether the quality or price are too low.
sellers are at an advantage because they have information about the product's quality
that buyers don't.
i.e., purchasing a piece of equipment that will be phased out and therefor the parts will
no longer be available.
affiliative leadership - Correct Answers -leadership style focusing on renewing a sense
of kinship and building trust among various factions whose cooperation is desirable for
promoting the goals of the organization.
these leaders tend to adopt an empathetic approach.
, in an effort to appease people and help them realize their true potential, there is a
danger that the goals of the organization will be side tracked and poor performances will
go unchecked.
competitive strategies - Correct Answers -differentiation, cost leadership, focus
broad differentiation strategy - Correct Answers -strategy where a business seeks to
differentiate its products or services from their competitors in ways that attract the
broadcast spectrum of customers in an established industry.
i.e., BMW and Apple
low-cost strategy - Correct Answers -entails the process of appealing to the broad
spectrum of potential buyers by being able to offer an overall low cost product or
service.
i.e., target and wal-mart
best-cost strategy - Correct Answers -entails the process of appealing to the broad
spectrum of potential buyers by being able to offer an overall low cost product or
service.
i.e., Ford with its Lincoln luxury models
a focused strategy on lower costs - Correct Answers -a brand positioning strategy that
concentrates on out competing rivals by offering customized products or services at a
lower cost to a smaller portion of the established buyers.
i.e., small retailers offering their own label or discounted line of products.
agile manufacturing - Correct Answers -flexible manufacturing practices utilizing
processes, tools and training to meet the demands of customers by turning speed and
agility into a key competitive advantage.
a company using this is in a much better position to take advantage of short windows of
opportunity and fast changes in customer demand.
alpha rating - Correct Answers -the return a security or portfolio would be expected to
earn if the market's rate of return was zero.
0.5 means that the stock/trust would outperform the market-based return by 0.5%.
anti-trust laws - Correct Answers -laws that prevent monopolies and promote
competition and fairness.
ask - Correct Answers -the net asset value of a mutual fund plus any sales charges.
asymmetric information - Correct Answers -information that differs between parties;
results in situation where consumers, suppliers, and producers do not have the same
information for which to base decisions on.
