Exam Questions for CAIB 4 Exam And Correct Answers
Briefly explain the 4 characteristics of a plan. - Answer-Simplicity - The plan should be easy
to understand and explain.
Practicality - The plan should be realistic and achievable.
Severability - All parts of the plan should be able to be executed even if 1 part falls through.
Flexibility - The plan should allow for modification so mid-term changes can be made.
Briefly explain what the external environment is. - Answer-The external environment is
made up of the brokerage's distant and near environments. An external environmental scan
should identify threats and opportunities that are outside the brokerage. The distant
environment cannot be controlled, but the near environment can be influenced by the
brokerage.
Identify and explain the 5 characteristics of goals. - Answer-Specific - Clearly state what is to
be accomplished.
Measurable - Capable of being measured to determine if it was achieved or not.
Action-oriented - Provides a clear expectation of what to do.
Realistic - Must be something that is achievable.
Timely - Must have a completion date or timeframe.
If you're given a goal that doesn't fit this criteria, it's going to be difficult to achieve.
What are the differences between the 3 organizational structures? (Give an advantage and
disadvantage for each.) - Answer-Line organization - Best suited for a smaller business. It
provides simplicity and a clear delegation of authority, but power is concentrated at the top
and line managers must be fully knowledgeable in a wide range of areas in order to make
decisions.
Functional organization - Decisions are made by a management specialist who can provide
employees with expert advice, but having too many managers giving instructions and not
making decisions can be distracting and slow down workflow.
, Line and Staff - Areas of authority are clearly defined with better communication on all
levels, but there is a cost associated with providing staff advice not directly related to
producing revenue.
What are the differences between the legal forms? - Answer-Sole proprietorships are
businesses belonging to a single individual. They're easy to start. You must be licensed by
ICM and in compliance with trade name regulations. The owner has the right to all profits,
but all liability rests with the owner, and the business lives and dies with the owner.
Partnerships can be general or limited. Liability is shared and the business won't live and die
with a single owner, however partnerships are difficult to dissolve and requires a partnership
agreement.
Corporations are legal entities, so liability is limited to the corporate assets only.
Corporations are created by government charter and ownership is evidenced by the share of
stock. The business will live on beyond the death of shareholders.
Define each of the operating affiliations. - Answer-The Loosely Knit Affiliation is an informal
gathering used to share ideas. A General Purpose Group is more formalized and can be a
general source of information or education like IBAM. Clusters are brokerages the come
together and share resources like market access, or a broker management system, but books
of business remain separate. Common identity groups are for large brokerages that deal
nationally or internationally and affiliate with other brokerages in different areas to assist in
local servicing of national/international accounts.
What is the HR planning process? - Answer-It is what you must complete before you can
even begin to hire someone. You must have an evaluation of the skills the new employee
should have, the hiring timetable, a contingency plan if no appropriate candidate can be
found, and prepare job descriptions containing position qualifications and specifications for
each position.
What are the advantages of internal recruiting? - Answer-It takes the guess work out of
hiring, it's cost effective with a shorter vacancy length, and it builds loyalty and reduces
turnover rate by showing employee advancement is possible.
Briefly explain the 4 characteristics of a plan. - Answer-Simplicity - The plan should be easy
to understand and explain.
Practicality - The plan should be realistic and achievable.
Severability - All parts of the plan should be able to be executed even if 1 part falls through.
Flexibility - The plan should allow for modification so mid-term changes can be made.
Briefly explain what the external environment is. - Answer-The external environment is
made up of the brokerage's distant and near environments. An external environmental scan
should identify threats and opportunities that are outside the brokerage. The distant
environment cannot be controlled, but the near environment can be influenced by the
brokerage.
Identify and explain the 5 characteristics of goals. - Answer-Specific - Clearly state what is to
be accomplished.
Measurable - Capable of being measured to determine if it was achieved or not.
Action-oriented - Provides a clear expectation of what to do.
Realistic - Must be something that is achievable.
Timely - Must have a completion date or timeframe.
If you're given a goal that doesn't fit this criteria, it's going to be difficult to achieve.
What are the differences between the 3 organizational structures? (Give an advantage and
disadvantage for each.) - Answer-Line organization - Best suited for a smaller business. It
provides simplicity and a clear delegation of authority, but power is concentrated at the top
and line managers must be fully knowledgeable in a wide range of areas in order to make
decisions.
Functional organization - Decisions are made by a management specialist who can provide
employees with expert advice, but having too many managers giving instructions and not
making decisions can be distracting and slow down workflow.
, Line and Staff - Areas of authority are clearly defined with better communication on all
levels, but there is a cost associated with providing staff advice not directly related to
producing revenue.
What are the differences between the legal forms? - Answer-Sole proprietorships are
businesses belonging to a single individual. They're easy to start. You must be licensed by
ICM and in compliance with trade name regulations. The owner has the right to all profits,
but all liability rests with the owner, and the business lives and dies with the owner.
Partnerships can be general or limited. Liability is shared and the business won't live and die
with a single owner, however partnerships are difficult to dissolve and requires a partnership
agreement.
Corporations are legal entities, so liability is limited to the corporate assets only.
Corporations are created by government charter and ownership is evidenced by the share of
stock. The business will live on beyond the death of shareholders.
Define each of the operating affiliations. - Answer-The Loosely Knit Affiliation is an informal
gathering used to share ideas. A General Purpose Group is more formalized and can be a
general source of information or education like IBAM. Clusters are brokerages the come
together and share resources like market access, or a broker management system, but books
of business remain separate. Common identity groups are for large brokerages that deal
nationally or internationally and affiliate with other brokerages in different areas to assist in
local servicing of national/international accounts.
What is the HR planning process? - Answer-It is what you must complete before you can
even begin to hire someone. You must have an evaluation of the skills the new employee
should have, the hiring timetable, a contingency plan if no appropriate candidate can be
found, and prepare job descriptions containing position qualifications and specifications for
each position.
What are the advantages of internal recruiting? - Answer-It takes the guess work out of
hiring, it's cost effective with a shorter vacancy length, and it builds loyalty and reduces
turnover rate by showing employee advancement is possible.
