Principles
Mr. Brown has inherited a small sum of money, and he wants to become a business owner. However, he has a full-time job that he plans to keep and very little time to operate his own business. What type of ownership should he consider?
A. Franchise
B. Corporation
C. Sole proprietorship
D. General partnership
B. Corporation
A corporation is owned by stockholders who have purchased stock. By investing in a corporation, Mr. Brown will be one of the owners who will share in the profits of the business but will not be responsible for the day-to-day operations. A general partnership is an agreement in which all partners are liable for a business's losses. A sole proprietorship is a form of business ownership in which the business is owned by one person. A franchise is a contractual agreement between a parent company and a franchisee to distribute goods or services.
Transportation routes, rates, and services may all be regulated by
A. laws.
B. competition.
C. level of service.
D. intermediaries.
A
Laws. Distribution systems must comply with government regulations. Businesses are expected to become familiar with the laws in any state in which they produce and/or store products and to comply with those laws. Competition, level of service, and intermediaries affect a company's distribution decisions, but they are not responsible for regulation of distribution activities.
Which of the following is an aspect of channel management that impacts customer service?
A.Advertising
B.Taxes
C.Protectionism
D.Timeliness
D
Timeliness. Channel management is the process of coordinating channel members to move goods and services to the end user. The way that a business manages its channel members impacts customer-service levels. An important aspect of channel management in relation to customer service is making sure that the customers receive their products in a timely manner. In many cases, customers order items for a specific purpose and need them on a certain date. Therefore, it is important for the business to monitor channel members' activities to ensure that the products are moving through the channel in the most efficient manner. Taxes are monies that individuals or businesses must pay to the government. Protectionism is a government's policy to protect domestic industries and businesses against foreign competition. Advertising is any paid form of non personal presentation of ideas, images, goods, or services.
When providing product information to clients, finance professionals should use
A. Standard responses.
B. Technical terms.
C. Financial acronyms.
D. Simple explanations.
D
Simple explanations. When providing product information to clients, finance professionals should keep the clients' point of view in mind. Clients may not be familiar with finance industry jargon, technical terms, or acronyms. Therefore, finance professionals should use simple, clear language that clients understand. While standard responses are sometimes helpful to finance professionals, it is usually better to keep individual clients in mind when providing product information since different clients are likely to have different knowledge bases.
A good way to calm an irate customer who has just made an angry complaint is to
A. Tell the customer his/her complaint is not justified.
B. Explain company policy related to the complaint.
C. Ask the customer why s/he thinks there is a problem.
D. Thank the customer for identifying the problem.
D
Thank the customer for identifying the problem. Letting the customer know that you appreciate hearing about the problem helps to calm irate customers. It's difficult for those customers to remain angry when you're letting them know how much you appreciate their information. Asking the irate customer why s/he thinks there is a problem or telling the customer his/her complaint is not justified would be likely to increase the customer's anger. Explaining company policy may help the situation but would be a later step in handling the complaint.
Which of the following is a source of relevant, valid written material:
A. Internet chat rooms
B. Personal e-mails
C. Government publications
D. Computer-generated memos
C. Government Publications
Government agencies and departments collect relevant information concerning many issues and publish the information in a written format. Therefore, government publications are a good source of relevant, valid written material that may be useful to businesses. For example, government agencies publish information about economic and employment trends that businesses use in the planning process. Internet chat rooms are sites on which individuals communicate with each other in real time and are not a source of relevant valid written material. Personal e-mails are messages to friends rather than a source of relevant, valid written material. Computer-generated memos do not necessarily contain relevant, valid written material.
Which of the following is an example of a conflict response mode:
A. Meditation
B. Avoidance
C. Frustration
D. Exclusion
B
Avoidance. The ways that people react to conflict are called conflict response modes. One of these modes is avoidance, which is the effort to avoid conflict. This type of behavior might include ignoring the situation or pretending that it doesn't exist. Avoidance behavior will not resolve conflict. Frustration is a negative effect of conflict rather than a response mode. Meditation is deep reflection and might be used before reacting to conflict. Exclusion is feeling left out or excluded from an activity.
Which of the following is one of the deciding factors in determining whether an item is a consumer or industrial good:
A.Price of the purchase
B.How the purchase is made
C.Who makes the purchase
D.When the purchase is made
C
Who makes the purchase. The difference between a consumer good or service and an industrial good or service is simply a matter of who buys the item and for what purpose. If a producer buys an item for use in office work, it is an industrial good. If an individual buys an item for personal use, it is a consumer good. How the purchase is made, the price of the purchase, and when the purchase is made are not deciding factors in determining whether an item is a consumer or industrial good.
The key factors involved in compounding growth are the amount of money you invest, how much your investment grows each year, and
A. your educational background and career.
B. how you earn the money that you invest.
C. how long your money is invested.
D. your mutual fund manager's education.
C.
How long your money is invested. The most important factors to consider in compounding growth are how much money you invest, how much your investment grows each year, and how long your money is invested. Investing is using money to make money, which means that if you invest money in the stock market, for example, you are likely to make an average of 10 percent each year. As the years pass, your investment will grow tremendously because you will be earning interest on interest. So, it is beneficial to invest for as long as possible to earn the largest amount of compound interest as possible. How you earn the money that you invest, your educational background and career, and your mutual fund manager's education have a much smaller impact on compounding growth than time does.
The employee didn't listen to the manager's explanation about how to perform a certain task because s/he had done a similar job before. Which of the following factors caused the employee not to listen effectively:
A. Age differences
B. Attention span
C. Past experiences
D. Language skills
C
Past experiences. People often think they know what someone is going to say before they say it and as a result do not listen well. People's past experiences may influence how well they listen because they think they already know the answer or understand the explanation. Effective listeners try to block out past experiences and focus on what the speaker is saying. Age differences, attention span, and language skills are other factors that may affect how well people listen
The purpose of active listening is to
A. help make boring lectures more interesting.
B. let the speaker know that you agree with the message and plan to act on it.
C. give the speaker your opinion.
D. let the speaker know that the message has been received and understood.
D. let the speaker know that the message has been received and understood
Active listening is primarily about understanding a speaker's meaning, not about communicating your agreement or voicing your own opinion. Active listening can help to make boring lectures more interesting, but that is not its purpose.
Which type of hotel security standard involves employing armed security guards in high-crime areas?
A. Personnel-related
B. Property-related
C. Physical-related
D. Procedure-related
A
Personnel-related. These standards involve hiring security personnel and/or training hotel staff members to report and deal with criminal activity. Physical-related and property-related security standards involve locking, lighting, and monitoring systems. Procedure-related standards involve monitoring criminal activity and establishing a system for making guests aware of dangerous areas around the hotel.
Businesses are affected by social factors in the external environment because
A. Every business creates consumer products.
B. Customer needs are affected by these factors as well.
C. A business cannot survive without social networking.
D. Customers no longer value quality.
B
Customer needs are affected by these factors as well. Businesses are affected by social factors in the external environment because customer needs are affected by these factors as well. And, meeting customer needs is the prime goal of every organiz ation. Not all businesses create consumer products. Businesses need not participate in social networking for survival, though it may help with promotion. Customers' needs are always changing, but they still value quality.
Compliance in the finance industry involves financial institutions operating within
A. specific territories.
B. regulatory guidelines.
C. organizational plans.
D. different relationships.
B
Regulatory guidelines. Financial institutions are required to follow governmental rules and regulations. Following these regulatory guidelines is the process of compliance. The purpose of compliance is to make the industry safe for consumers and to maintain the stability of the financial system. Compliance does not involve operating within specific territories, organization plans, or different relationships.
Which of the following would be an effective way to communicate a job-related suggestion to your supervisor:
A. An office memorandum
B. A letter of transmittal
C. A business letter
D. A personal letter
A.
An office memorandum. An office memorandum, or memo, is the most commonly used method of in-house communication in many businesses. It may be handwritten, typed, or sent by e-mail. A letter of transmittal is a letter that accompanies a long report or proposal. A business letter would be used to communicate with another business. It is inappropriate to write a personal letter to a supervisor.
"This is an exciting new opportunity for you," says Jane's boss. Which of the following nonverbal cues would appropriately reinforce that message:
A. Smiling
B. Focusing eyes on the computer
C. Slouching
D. Looking out the window
A. Smiling
A smile conveys a positive message and reinforces good news. Poor posture sends the message that a person doesn't really care about what s/he is saying. Lack of eye contact sends a message that the speaker may not be telling the truth or may wish to be doing something else.
How could the corporate headquarters of a national restaurant chain use the U.S. Census data that it obtained online?
A. To determine if the market wants a new restaurant in the area
B. To determine what type of restaurant to open in a geographic area
C. To determine if the zoning laws in a certain geographical area are reasonable
D. To determine where to locate a new restaurant based on population growth
D
To determine where to locate a new restaurant based on population growth. The U.S. Census data provide information on designated geographic areas that indicate demographic data, social data, and economic data, and allow comparisons across years. The restaurant could use the data to determine whether a geographic area is growing. The type of restaurant to open is already pre-determined by the types of restaurants in the chain. Although the Census data provide social characteristics about a particular area, the Census data do not provide information about the target market's level of desire for a new restaurant. Because zoning laws vary and change, the restaurant headquarters needs to verify zoning requirements with the appropriate agency or government office.
What tends to occur when a country is experiencing political instability?
A.Its currency loses value.
B.Unemployment rates decrease.
C.Domestic trade improves.
D.Commodity trade increases.
A
Its currency loses value. Most countries have their own currency. A currency value can change in relation to other countries' currency values. Many factors can affect a currency's value. When a country experiences political instability, its currency value decreases because the country's future is uncertain. High unemployment rates and insufficient trade are factors that can lead to or result from political unrest.
Which of the following statements best describes the taxation of Roth IRAs:
A. Contributions and withdrawals during retirement are both taxed.
B. Contributions are tax deductible, but withdrawals during retirement are taxed.
C. Contributions are taxed, but withdrawals during retirement are not.
D. Contributions and withdrawals during retirement are tax deductible.
C
Contributions are taxed, but withdrawals during retirement are not. Contributions paid into Roth Individual Retirement Accounts (IRAs) are taxed. But, earnings on the growing funds in the account and withdrawals during retirement are tax-free. Unlike Roth IRAs, contributions to traditional IRAs are tax deductible, but investors must pay taxes on the withdrawals they make from these accounts during retirement.
Most businesses provide employee orientation as soon as new employees report for work because
A. Employees can't work until they have been oriented.
B. Orientation focuses on specific job tasks.
C. Employees can learn everything in the beginning.
D. That is when employees are anxious to learn.
D
That is when employees are anxious to learn. New employees are anxious to learn about the company; its policies, rules, and regulations; working hours; benefits; and any other factors that will affect them. Giving them this information at the beginning takes advantage of their desire to learn. Employees can start work without orientation, but they will need to ask a lot of questions that would have been answered in orientation. Orientation presents basic company information and does not try to teach employees everything at one time or focus on specific job tasks.
If you are going to successfully lead change within your organization, you need to be
A. Subtle.
B. Indifferent.
C. Persuasive.
D. Resistant.
C. persuasive
Change doesn't just happen on its own. To lead change, change leaders need to be persuasive—they must be able to get others within their organizations to see things their way, do things their way, or agree with them. Subtle and indifferent (uncaring) attitudes don't usually prompt resistant people to embrace change.
Calculate the range if 30 customers visit a business two times a month, 45 customers visit the business three times a month, 55 customers visit the business four times a month, and 20 customers visit the business five times a month.
A. 4
B. 3
C. 2
D. 5
B
3. Range is the distance between the highest value and the lowest value. In this example, five is the highest value because it represents the most times during the month that customers visited the business. The lowest number of times customers visited the business was two times a month. To calculate the range, subtract the lowest value from the highest value (5-2 = 3).
When a business collects marketing information from its customers, what should it consider about its consumer-privacy laws?
A. They relate to health-care data.
C. They vary by jurisdiction.
B. They apply only to children.
D. They are enforceable internationally.
C
They vary by jurisdiction. Businesses have the ability to easily collect information from people who visit their websites and from customers who purchase their goods and services. While collecting this type of information helps a business to determine which products sell and what customers want, the business must be careful not to break consumer-privacy laws, which vary by jurisdiction. Jurisdiction is the authority a court has to resolve a legal issue. Jurisdiction is affected by many factors including geographic location (e.g., state,province, country), customer (e.g., children), and industry (e.g., financial, healthcare). Consumer-privacy laws are not enforceable at an international level.
When the U.S. federal government owes money to a contracted employee or business, the government
must pay the employee or business according to the
A. Early Bird Act.
B. Prompt Payment Act.
C. Secure Contracting Act.
D. Government Guidelines Act.
B.
Prompt Payment Act. When the U.S. federal government owes money to a contracted employee or business, the government must pay the employee or business according to the Prompt Payment Act. There are no U.S. legal requirements for financial exchange called "Early Bird," "Secure Contracting," or "Government Guidelines."
Prohibiting the use of asbestos in buildings is an example of government efforts to
A. Help the disadvantaged.
C. Stabilize the economy.
B. Provide public goods.
D. Protect public health.
D
Protect public health. Government has passed many laws intended to protect public health by regulating the use of products that may be harmful. Asbestos has been found to be harmful to people's health. Public welfare programs provide assistance to disadvantaged individuals. Government attempts to stabilize the economy by controlling the amount of money in circulation, adjusting interest rates, and through various other financial measures.