Which two key elements does an effective organization include?
✓ Correct Answer: Human Interaction & Structure
Why does a line organization structure function most effectively in a crisis situation?
✓ Correct Answer: It establishes a direct flow of authority
A company might divide itself into smaller groups that best match the types of
customers it serves. What is this an example of?
✓ Correct Answer: Departmentalization
Which primary driver does management use for an organization's structure?
✓ Correct Answer: Achievement of company goals
Which step in the organizing process results in management grouping work activities
into units within the organization?
✓ Correct Answer: Departmentalization
A high-tech startup company is launching a marketing campaign for its new social
media portal by highlighting how the portal exceeds the connectivity and collaboration
capabilities of all other social media sites.
Which type of competitive advantage is this company leveraging?
✓ Correct Answer: product
Which marketing strategy is devoted to maintaining continuous bottom line prices rather
than relying on short-term price-cutting tactics such as cents-off coupons, rebates, and
special sales?
✓ Correct Answer: Everyday Low Pricing
When would a pull promotional strategy enhance a competitive advantage to market a
product better than a push strategy?
✓ Correct Answer: When demand for the product is driven by the end user
Which marketing tool is often used to build effective relationship marketing campaigns?
✓ Correct Answer: Affinity Programs
Which element of the promotional mix has the advantage of messaging that can be
tailored for each customer but the disadvantage of a high cost per contact?
✓ Correct Answer: Personal Selling
What three factors should be addressed in a successful marketing plan?
✓ Correct Answer: Target Market, Sales Revenue Goals and Plan Implementation
Timeline
Which three characteristics are measured in demographic segmentation?
✓ Correct Answer: Race & Ethnicity, Income and Household Size
In which three ways does business-buying behavior differ from consumer-buying
behavior?
,✓ Correct Answer: A group or committee often makes decisions
Purchasers often invite selected providers to bid on a purchase
Buyers face organizational influences that affect their own preferences
Which three factors suggest a product should be marketed as a specialty product?
✓ Correct Answer: Priced high
Purchased infrequently
Available from a small number of retail outlets
With which two types of products does a marketing strategy rely on advertising more
than personal selling?
✓ Correct Answer: Accessories to primary products
Consumable supplies
After years of marketing a body lotion, a cosmetics company begins promoting the
lotion as an insect repellent as well.In which three product life cycle extension strategies
did this company engage?
✓ Correct Answer: Adding new users, finding new uses for the product, increasing
frequency of use.
What are three qualities of strong brand equity?
✓ Correct Answer: Awareness, Loyalty and favorable images
A customer intends to purchase her favorite cereal. It is out of stock, so she purchases
an alternative brand of cereal instead.Which stage of brand loyalty is this customer in?
✓ Correct Answer: brand preference
Which manufacturer distribution model is enhanced by the shipping and tracking
capabilities of a global package delivery service?
✓ Correct Answer: Direct
Which three tasks are key responsibilities of operations managers?
✓ Correct Answer: Planning the overall production process
Determining the best layout for the firm's facilities
Implementing the production plan
Which two characteristics does a Just-In-Time (JIT) System have?
✓ Correct Answer: Production using JIT reduces a firm's inventory costs.
A JIT system seeks to eliminate anything that does not add value in operations
activities.
Which aspect of operations management do the ISO 9000 standards address?
✓ Correct Answer: Establishment of effective quality systems
Which manufacturing model uses technology to produce small runs of customized
products cost effectively?
✓ Correct Answer: Flexible
,Which two of the following distribution channels would take title of the products they
handle?
✓ Correct Answer: Limited-function merchant wholesaler
Full-function merchant wholesaler
Which economic graph is used by organizations to regulate production by predicting the
amount of product buyers will purchase at different prices?
✓ Correct Answer: Demand Curve
Which two factors drive demand in a microeconomic system?
✓ Correct Answer: Price of substitute goods
Customer preference
How does a sudden shortage of a commodity product affect the immediate demand for
the product at its current price?
✓ Correct Answer: Demand increases
Which two impacts result from a nation's increase in productivity?
✓ Correct Answer: Economy expands
Personal wealth increases
For which two purposes will the U.S. Federal Reserve System follow an expansionary
monetary policy?
✓ Correct Answer: To encourage bankers to make loans
To cut the cost of borrowing
Which two economic impacts should a manager anticipate when the U.S. government
reduces the number of Treasury bills, Treasury Notes, and Treasury bonds it sells?
✓ Correct Answer: A rise of interest rates on these securities
An increase in overall cost of debt to private borrowers
What is one role of a financial manager?
✓ Correct Answer: Analyzing major investment decisions
Which two activities are finance activities rather than accounting activities?
✓ Correct Answer: Making capital market investments
Creating a financial plan
Which three sources should a business consider when seeking a long-term funding
source?
✓ Correct Answer: Venture capital
Public sale of stocks
Hedge funds
In which type of security should a business invest its excess cash in anticipation of
paying off the current year's tax liability?
✓ Correct Answer: commerical paper
, Which role does the underwriter play in financing business operations when using the
capital market to sell securities to the public?
✓ Correct Answer: It assumes the risk of the assessed value of the security from the
issuer.
Why should a manager use financial controls in a firm's financial plan?
✓ Correct Answer: To determine the accuracy of forecasted revenues, costs, and
expenses
What does a CFO use in financial planning to determine the expected level of revenue
for future periods?
✓ Correct Answer: Sales forecast plus non-sales revenue
How did the Dodd-Frank Wall Street Reform and Consumer Protection Act impact
retailers?
✓ Correct Answer: It capped the debit card swipe fee at 21 cents.
Which two activities are prohibited by insider trading laws and should be avoided by a
firm's employees?
✓ Correct Answer: Buying stock in the public company for which the employee works
based on a conversation the employee overheard at a cocktail party between two
of the company's executives
Selling company stock because a co-worker told the employee the company's
new drug is failing in clinical trial
Which two risks does a firm face by funding the purchase of long-term assets with short-
term funding sources?
✓ Correct Answer: Volatility of interest rates
Frequent renewals
Which funding source should a firm use if it wishes to secure long-term financing while
retaining all of its equity?
✓ Correct Answer: Long-term commercial bank loan
Which three characteristics make commercial paper a low-risk, attractive source of
short-term funding for a business?
✓ Correct Answer: It can make large amounts of money available.
It carries interest rates that are 1 to 2 percent less than bank loans.
It has a maturity that ranges between 1 and 270 days.
What should a firm do to manage the risk of using leverage when exploring long-term
funding options?
✓ Correct Answer: Ensure that earnings remain larger than interest payments
Which financial statement should an investor examine to identify the liabilities of a firm?
✓ Correct Answer: The balance sheet
A company wishes to determine if it should fund a project with bonds or equity.Which
business concept would it most likely use to assist in the decision?
✓ Correct Answer: Human Interaction & Structure
Why does a line organization structure function most effectively in a crisis situation?
✓ Correct Answer: It establishes a direct flow of authority
A company might divide itself into smaller groups that best match the types of
customers it serves. What is this an example of?
✓ Correct Answer: Departmentalization
Which primary driver does management use for an organization's structure?
✓ Correct Answer: Achievement of company goals
Which step in the organizing process results in management grouping work activities
into units within the organization?
✓ Correct Answer: Departmentalization
A high-tech startup company is launching a marketing campaign for its new social
media portal by highlighting how the portal exceeds the connectivity and collaboration
capabilities of all other social media sites.
Which type of competitive advantage is this company leveraging?
✓ Correct Answer: product
Which marketing strategy is devoted to maintaining continuous bottom line prices rather
than relying on short-term price-cutting tactics such as cents-off coupons, rebates, and
special sales?
✓ Correct Answer: Everyday Low Pricing
When would a pull promotional strategy enhance a competitive advantage to market a
product better than a push strategy?
✓ Correct Answer: When demand for the product is driven by the end user
Which marketing tool is often used to build effective relationship marketing campaigns?
✓ Correct Answer: Affinity Programs
Which element of the promotional mix has the advantage of messaging that can be
tailored for each customer but the disadvantage of a high cost per contact?
✓ Correct Answer: Personal Selling
What three factors should be addressed in a successful marketing plan?
✓ Correct Answer: Target Market, Sales Revenue Goals and Plan Implementation
Timeline
Which three characteristics are measured in demographic segmentation?
✓ Correct Answer: Race & Ethnicity, Income and Household Size
In which three ways does business-buying behavior differ from consumer-buying
behavior?
,✓ Correct Answer: A group or committee often makes decisions
Purchasers often invite selected providers to bid on a purchase
Buyers face organizational influences that affect their own preferences
Which three factors suggest a product should be marketed as a specialty product?
✓ Correct Answer: Priced high
Purchased infrequently
Available from a small number of retail outlets
With which two types of products does a marketing strategy rely on advertising more
than personal selling?
✓ Correct Answer: Accessories to primary products
Consumable supplies
After years of marketing a body lotion, a cosmetics company begins promoting the
lotion as an insect repellent as well.In which three product life cycle extension strategies
did this company engage?
✓ Correct Answer: Adding new users, finding new uses for the product, increasing
frequency of use.
What are three qualities of strong brand equity?
✓ Correct Answer: Awareness, Loyalty and favorable images
A customer intends to purchase her favorite cereal. It is out of stock, so she purchases
an alternative brand of cereal instead.Which stage of brand loyalty is this customer in?
✓ Correct Answer: brand preference
Which manufacturer distribution model is enhanced by the shipping and tracking
capabilities of a global package delivery service?
✓ Correct Answer: Direct
Which three tasks are key responsibilities of operations managers?
✓ Correct Answer: Planning the overall production process
Determining the best layout for the firm's facilities
Implementing the production plan
Which two characteristics does a Just-In-Time (JIT) System have?
✓ Correct Answer: Production using JIT reduces a firm's inventory costs.
A JIT system seeks to eliminate anything that does not add value in operations
activities.
Which aspect of operations management do the ISO 9000 standards address?
✓ Correct Answer: Establishment of effective quality systems
Which manufacturing model uses technology to produce small runs of customized
products cost effectively?
✓ Correct Answer: Flexible
,Which two of the following distribution channels would take title of the products they
handle?
✓ Correct Answer: Limited-function merchant wholesaler
Full-function merchant wholesaler
Which economic graph is used by organizations to regulate production by predicting the
amount of product buyers will purchase at different prices?
✓ Correct Answer: Demand Curve
Which two factors drive demand in a microeconomic system?
✓ Correct Answer: Price of substitute goods
Customer preference
How does a sudden shortage of a commodity product affect the immediate demand for
the product at its current price?
✓ Correct Answer: Demand increases
Which two impacts result from a nation's increase in productivity?
✓ Correct Answer: Economy expands
Personal wealth increases
For which two purposes will the U.S. Federal Reserve System follow an expansionary
monetary policy?
✓ Correct Answer: To encourage bankers to make loans
To cut the cost of borrowing
Which two economic impacts should a manager anticipate when the U.S. government
reduces the number of Treasury bills, Treasury Notes, and Treasury bonds it sells?
✓ Correct Answer: A rise of interest rates on these securities
An increase in overall cost of debt to private borrowers
What is one role of a financial manager?
✓ Correct Answer: Analyzing major investment decisions
Which two activities are finance activities rather than accounting activities?
✓ Correct Answer: Making capital market investments
Creating a financial plan
Which three sources should a business consider when seeking a long-term funding
source?
✓ Correct Answer: Venture capital
Public sale of stocks
Hedge funds
In which type of security should a business invest its excess cash in anticipation of
paying off the current year's tax liability?
✓ Correct Answer: commerical paper
, Which role does the underwriter play in financing business operations when using the
capital market to sell securities to the public?
✓ Correct Answer: It assumes the risk of the assessed value of the security from the
issuer.
Why should a manager use financial controls in a firm's financial plan?
✓ Correct Answer: To determine the accuracy of forecasted revenues, costs, and
expenses
What does a CFO use in financial planning to determine the expected level of revenue
for future periods?
✓ Correct Answer: Sales forecast plus non-sales revenue
How did the Dodd-Frank Wall Street Reform and Consumer Protection Act impact
retailers?
✓ Correct Answer: It capped the debit card swipe fee at 21 cents.
Which two activities are prohibited by insider trading laws and should be avoided by a
firm's employees?
✓ Correct Answer: Buying stock in the public company for which the employee works
based on a conversation the employee overheard at a cocktail party between two
of the company's executives
Selling company stock because a co-worker told the employee the company's
new drug is failing in clinical trial
Which two risks does a firm face by funding the purchase of long-term assets with short-
term funding sources?
✓ Correct Answer: Volatility of interest rates
Frequent renewals
Which funding source should a firm use if it wishes to secure long-term financing while
retaining all of its equity?
✓ Correct Answer: Long-term commercial bank loan
Which three characteristics make commercial paper a low-risk, attractive source of
short-term funding for a business?
✓ Correct Answer: It can make large amounts of money available.
It carries interest rates that are 1 to 2 percent less than bank loans.
It has a maturity that ranges between 1 and 270 days.
What should a firm do to manage the risk of using leverage when exploring long-term
funding options?
✓ Correct Answer: Ensure that earnings remain larger than interest payments
Which financial statement should an investor examine to identify the liabilities of a firm?
✓ Correct Answer: The balance sheet
A company wishes to determine if it should fund a project with bonds or equity.Which
business concept would it most likely use to assist in the decision?
