Business MCQs Test Bank

24) Which of the following statements about leadership is true?

A. leaders are managers.
B. leaders are hierarchically superior to followers.
C. managers are leaders.
D. Nonsanctioned leadership is as important as or more important than formal influence.
E. Formal rights enable managers to lead effectively.

25) Danielle wants to become a surgeon, not only because achieving this goal will give her self-respect and autonomy, but also because she wants a job with high status and recognition from others. Which of Maslow’s needs is Danielle trying to fill?
A. self-actualization
B. psychological
C. esteem
D. safety
E. social

26) Which level of Maslow’s hierarchy of needs deals with satisfying one’s hunger, thirst, and need for sex?
A. safety
B. esteem
C. social
D. psychological
E. physiological

27) Which of the following statements best defines a work group?
A. The performance of a work group is generally greater than the sum of its inputs from individual members.
B. A work group consists of 3 or more people from across departmental or functional lines.
C. A work group consists of 3 or more people who take on self-supervising responsibilities.
D. A work group is a group comprised of 10 or more people
E. A work group interacts primarily to share information, rather than to engage in work that requires joint effort.

28) Negotiation can be defined as a process in which two or more parties exchange goods or services and attempt to agree upon _____.
A. the exchange rate for those goods and services
B. effective arbitrators for disputes
C. a model of the negotiation process for resolving differences
D. the monetary value of the exchanged items
E. acceptable bargaining strategies for obtaining the goods and services

29) The traditional view of conflict is the belief that conflict is _____.
A. harmful
B. situationally-dependent
C. necessary
D. neutral
E. natural

30) John Kotter’s view argues that management focuses on coping with complexity, whereas leadership focuses on coping with _____.
A. conflict
B. morale
C. defeat
D. change
E. success

31) Examples of on-the-job training include all of the following except _____.
A. job rotation
B. understudy assignments
C. simulation centers
D. formal mentoring programs
E. apprenticeship

32) Training employees how to be better listeners falls under which of the following training categories?
A. ethical skills
B. interpersonal skills
C. problem-solving skills
D. cultural skills
E. technical skills

33) _____ can be used to increase the perception that employees are treated fairly.
A. Selective evaluation
B. Documenting with a journal
C. Multiple raters
D. Focusing on subjective evaluations
E. Due process

34) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity?
A. intelligence tests
B. work sampling
C. integrity evaluations
D. aptitude tests
E. behavioral assessment

35) Which type of skill training has become increasingly important in organizations?
A. financial
B. problem solving
C. technical
D. interpersonal
E. social

36) Investors bragged about their investing expertise during the stock market rally between 1996 and early 2000, then blamed analysts, brokers, and the Federal Reserve when the market imploded in 2000. These investors were most probably guilty of what?
A. fundamental attribution error
B. the halo effect
C. self-serving bias
D. distinctiveness
E. selective perception

37) The “realistic” personality from Holland’s typology of personality and congruent occupations would be well suited for which of the following jobs?
A. painter
B. mechanic
C. accountant
D. lawyer
E. biologist

38) An example of change in the nature of the work force is an increase in_____.
A. college attendance
B. capital equipment
C. mergers and consolidations
D. divorce rates
E. more cultural diversity

39) Whenever Jane is successful she takes full credit for what has happened, but whenever she is unsuccessful she attributes her failure to bad luck or blames one of her fellow employees. She is guilty of _____.
A. fundamental attribution error
B. the halo effect
C. attribution bias
D. distinctiveness
E. self-serving bias

40) A task that is subdivided into many separate jobs is considered to have _____.
A. a high degree of departmentalization
B. a high degree of work specialization
C. a low degree of decentralization
D. a low degree of structure
E. a high degree of matrix structuring

41) Which of the following would NOT be classified as a time-series technique?
A. simple moving average
B. box Jenkins technique
C. exponential smoothing
D. regression model
E. trend projections

42) According to David Maister, the most complex projects requiring innovation and creativity are called _________.
A. “procedures” projects
B. “gray hair” projects
C. “brain surgery” projects
D. “grinding” projects

43) Which of the following statements are true about time-series forecasting?
A. Time series analysis is based on the idea that the history of occurrences over time can be used to predict the future.
B. Time series analysis tries to understand the system underlying and surrounding the item being forecast.
C. Under time-series methods, demand is divided into the time-based components such as daily, weekly, etc.
D. Time series methods are useful for long-range forecasts when the demand pattern is erratic

44) According to Goldratt and Fox, a useful performance measure to treat inventory is ______.
A. inventory turnover
B. current ratio
C. quick ratio
D. dollar days

45) The ______ the percentage of contact time between the service system and the customer, the ________ the degree of interaction between the two during the production process.
A. greater, lesser
B. none of these answers
C. lesser, greater
D. greater, greater

46) __________ says to look for opportunities to invest in positive-NPV projects in foreign markets or to develop derivatives or design arrangements that enable firms to cope better with the risks they face in their foreign operations.
A. The Principle of Risk-Return Trade-off
B. The Principle of Valuable Ideas
C. The Principle of Diversification
D. The Principle of Capital Market Efficiency

47) A checking account is __________.
A. a place to “collect” money between inflows and outflows
B. an account that acts like a reservoir
C. useful because you can add money in any amount
D. all of these

48) __________ says to recognize the value of hidden options in a situation, such as the foreign exchange options in some derivative instruments.
A. The Options Principle
B. The Time Value of Money Principle
C. The Principle of Comparative Advantage
D. The Principle of Two-Sided Transactions

49) Which of the following statements is true?
A. The Principle of Incremental Benefits says to consider the possible ways to minimize the value lost to capital market imperfections, such as asymmetric taxes, asymmetric information, and transaction costs.
B. The Principle of Valuable Ideas suggests to look for opportunities to create value by issuing securities that are in short supply, perhaps resulting from changes in tax law.
C. The Time Value of Money Principle advises to include any time-value-of-money tax benefits from capital structure choices.
D. all of these

50) Due to asymmetric information, the market fears that a firm issuing securities will do so when the stock is _________.

A. undervalued
B. being sold by insiders
C. overvalued

D. caught up in a bear market

51) __________ says to seek out investments that offer the greatest expected risk-adjusted real return.
A. The Principle of Incremental Benefits
B. The Principle of Valuable Ideas
C. The Signaling Principle
D. The Principle of Self-Interested Behavior

52) An all-equity-financed firm would __________.
A. not pay any income taxes because interest would exactly offset its taxable income.
B. pay corporate income taxes if its taxable income is positive
C. pay corporate income taxes because it would have interest expense.
D. not pay corporate income taxes because it would have no interest expense.

53) “Hard” capital rationing refers to the rationing __________.
A. imposed by external factors
B. always imposed by debt holders
C. imposed internally by the shareholders
D. always imposed by competitors

54) An investor’s risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
A. Each stock in the portfolio has its own beta.
B. Each stock in the portfolio will have a beta greater than one.
C. Selling any stock in this portfolio will lower the beta of the portfolio.
D. An investor cannot change the risk of this portfolio by her choice about personal leverage (lending or borrowing).

55) Under capital rationing, given the choice among several equally attractive investments, the best tool to use is the __________.
A. Internal Rate of Return method
B. Net Present Value method
C. Payback method
D. Profitability Index method

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