SEJPME I&…. 100% . Grade A.
SEJPME I&…. 100%
401. Military member to maintain a higher standard of conduct than might be accepted in the larger society and are subject to the rules and regulations of the Uniform Code of Military Justice.
402. A state of well-being in which one is aware of personal abilities and limits, copes well with life stresses, works productively and effectively, and contributes positively to his or her communities is known as _____. It describes a healthy body, mind, and spirit which can be seen in a person’s ability to deal with typical stressors.
a) Physical fitness
b) Psychological health
c) Post-traumatic stress disorder
d) Personal awareness
403. Exposure to stressful situations, trauma, and combat will cause a response and resulting change. These responses and changes will all be negative.
404. Symptoms of _____ include depression, substance abuse, problems of memory and cognition, and other physical and mental health problems. It is also associated with difficulties in social or family life, including occupational instability, mental problems, family discord, and difficulties in parenting.
a) Post-traumatic stress disorder
b) Psychiatric disorder syndrome
c) Psychological trauma dysfunction
d) Traumatic brain injury
405. Typical signs of _____ include headaches, memory gaps, confusion, attention problems, irritability, ringing in the ears, dizziness, nausea, fatigue, slowed reaction time, sleep difficulty, and performance difficulties.
a) Port-traumatic stress disorder
b) Psychiatric disorder syndrome
c) Psychological dysfunction
d) Traumatic brain injury
406. Receiving realistic training, understanding the types of situations encountered in war, eating well, getting enough rest, and having meaningful relationships and friendships are all helpful in building _____ to the challenges and strains of military service.
d) Unity of effort
407. ¬¬¬¬_____ is an integrative and holistic framework to better understand, assess, and maintain the fitness of the joint force.
a) Wounded Warrior Program
b) Total Force Fitness (TFF) Program
c) Physical Fitness Testing (PFT) Program
d) Performance Evaluation Program
408. The joint force commander has the operational authority and responsibility to tailor forces for the mission at hand, selecting those that most effectively and efficiently ensure success.
409. Within joint command organizations, leadership and ethics considerations require us to _____ and consider not only personal experiences, but also the lessons learned from others' experiences - both positive and negative.
a) seek out professional assistance
b) know all of the facts
c) acknowledge our own prejudice
d) critically think about
410. Concussion is a term many service members prefer to use instead of "brain injury" when discussing head injuries (mild traumatic brain injuries or mTBI).
411. U.S. Law, Title 10, USC, Section 153, gives the _____ authority regarding joint force development, specifically providing authority to develop doctrine for the joint employment of the Armed Forces, and to formulate policies for the joint training of the Armed Forces to include policies for the military education and training of members of the Armed Forces.
a) Joint Chiefs of Staff
b) Service Chiefs
c) Chairman of the Joint Chiefs of Staff
d) Secretary of Defense
412. U.S. military service is based on values that U.S. military experience has proven to be vital for operational success. These values adhere to the most idealistic societal norms, are common to all the Services, and represent the essence of military professionalism. The five values we discussed that entail "Joint Service" consist of: duty, honor, courage, integrity, and selfless service.
413. Recognizing potentially hazardous or negative situations in advance is crucial to being prepared to prevent them from occurring to begin with. With experience and maturity, the ability to instinctually recognize signs of potential trouble increases.
414. The foremost value of joint force leaders is _____.
d) physical courage
415. The ¬¬¬¬¬_____ focuses on planning and execution of operations using operational art to develop strategies, campaigns, and operations and employ military forces by integrating ends, ways, and means.
a) Strategic level
b) Operational level
c) Tactical level
d) Political level
416. Read the following scenario, and as you read it, think about the 12 Principles of Joint Operations. Each principle applies to the described situation in some capacity, but consider their relative importance for this particular scenario. In the boxes provided below, indicate whether the principle listed is MOST RELEVANT or LEAST RELEVANT to the scenario by typing in your response.
A sometimes-ally of the United States requests U.S. support in maintaining stability during an insurgent uprising. The U.S. agrees to lead a multinational peace-keeping force in the volatile country, since supporting the legitimate government adds stability to a key strategic region. The insurgents comprise of a number of radical groups that follow a shared political ideology and collectively seek economic control within the region. They appear to be funded by narcotics cartels and organized crime syndicates in Central and Northern South America. The insurgents use a variety of disruptive, irregular warfare tactics to exert their influence, including the use of Improvised Explosive Devices (IEDs), ambushes on peace-keeping forces, civilian kidnapping, graft, and civilian extortion. U.S. forces have also detected numerous cyber-attacks that appear to originate from insurgent sources; however, none of these have been successful
d) Economy of Force
f) Unity of Command
Which principles did you rank as among the most important? Explain why.
Restraint, perseverance, and legitimacy were ranked among the most important because these principles directly support irregular warfare conditions, such as those described in the scenario. Security was also ranked highly, because the scenario opposition forces use irregular means, such as IEDs and ambush attacks. Next, Economy of Force was ranked among the top principles because stability operations must be carried out with the upmost efficiency, so that the U.S. achieves an optimal return on investment. Finally, because the mission involves a multinational coalition, Unity of Command takes on greater priority; coordination among forces becomes more challenging as a greater number of units, agencies, and countries become involved.
Which principles did you rank as among the least important? Explain why.
Having a clear objective is vital. However, since the strategic objective in this scenario is to maintain stability in an ally's country, developing more detailed operational objectives takes on comparatively less significance. Similarly, since the mission involves stabilization, versus aggression, taking offensive action becomes less important, as is the element of surprise, the exploitation of maneuver, and the concentration of a large mass of combat power. Finally, while simplicity is important (particularly in multinational operations), it is less vital in the described scenario; given the complexity of the situation, simple responses may not be sufficient.
417. The following image is a concept map for you to review. Note that there are several empty boxes on the map labeled "Question 1" through "Question 5". In the boxes provided below, choose the proper concept for each of these empty boxes by typing in your response in the space provided.
Question 1: Which of the following concepts best fits this box? (Directing, Operations, Security, Communications, or Financing): Security
Question 2: Which of the following concepts best fits this box? (Share information, Reporting an event, Establishing mutual security, Communicating with leaders in the area, or Counterinsurgency): Share Information
Question 3: Which of the following concepts best fits this box? (Joint Communications, Joint Maneuvers, Joint Action Planning, Joint Matters, or Joint Forces): Joint Matters vs Joint Force
Question 4: This is the purposeful reliance by one Service on another Service's capabilities to maximize complementary and reinforcing effects of both, with the degree of interdependence varying with specific circumstances. (Joint Agreement, Joint Independence, Joint Interdependence, Joint Dependence, or Joint Cooperation): Joint Interdependence
Question 5: Which of the following concepts best fits this box? (Associate, Develop, Refine, Collaborate, or Synchronize): Synchronize
418. The _____ system provides many things, including means by which the President and the SecDef can receive warnings and intelligence so that accurate and timely decisions can be made.
Nuclear Command and Control
National Military Command
Joint Force Commander’s Communication
419. Think about the module you just completed. What are three things you already knew about this material, three things you learned, and three things you would like to learn more about. Record your answers below:
I already knew
I just learned
I would like to learn more
420. As an example of General vs. Specialized Forces, Navy and Air Force Service members, accustomed to working with enlisted personnel who are specialized technicians, may approach joint staff work from a more _____ perspective than that of their ground Service member counterparts.
a) Technical or managerial
421. A _____ is a series of related major operations aimed at achieving strategic and operational objectives within a given time and space.
422. Select the answer that matches the following definition. This purpose of joint operations is to defend national interests, not only in conflict but through preventative measures to deter potential adversaries who could threaten the vital interests of the U.S. or its partners.
a) Provide a stabilizing presence
b) Project power despite anti-access/area denial challenges
c) Maintain a safe, secure, and effective nuclear deterrent
d) Deter and defeat aggression
423. Select the answer that matches the following definition. This type of command is composed of significant assigned components of two or more Military Departments.
a) Specified Combatant Command
b) Unified Combatant Command
c) Subordinate Unified Command
d) Joint Task Force
424. _____ is the employment of available weapons and other systems to create a specific lethal or nonlethal effect on a target.
a) Movement and maneuver
b) Command and control
c) Joint fires
425. A functional Component Command has many favorable factors associated with it, including reduced span of control, integrated planning, unity of effort, and _____.
a) control over the scheme of maneuver
b) responsible for service-specific functions
c) comprised of service forces
d) decreased combat efficiency
426. Differences between the Services in career paths leading up to a joint assignment may surprise new staff Service members in joint assignments. This demonstrates which key element to remember when working with other services?
a) Prior experience working with senior officers vs. little or none
b) Centralized vs. decentralized approach
c) Static vs. dynamic mission sets
d) General vs. specialized enlisted forces
427. _____ are the broad and enduring purposes for which the Services and the Combatant commands (or CCMDs) were established by law.
428. Select the answer that matches the following definition. This purpose of joint operations is to conduct a sustainable pace of presence operations abroad, including rotational deployments and bilateral and multilateral training exercises.
a) Deter and defeat aggression
b) Maintain a safe, secure, and effective nuclear deterrent
c) Project power despite anti-access/area denial challenges
d) Provide a stabilizing presence
430. Some services have an emphasis that vacillates between combat, law enforcement, and safety patrols. This demonstrates which key element to remember when working with other services?
a) centralized vs. decentralized approach
b) base-centric vs. ship-centric
c) static vs. dynamic mission sets
d) size and capacity vs. speed and flexibility
431. Select the answer that matches the following definition. This type of command is established by unified combatant commanders, and conducts operations on continuing basis using specified criteria.
a) Specified Combatant Command
b) Unified Combatant Command
c) Joint Task Force
d) Subordinate Unified Command
432. Select the answer that matches the following definition. This purpose of joint operations is to maintain an arsenal capable of deterring potential adversaries and to assure U.S. allies and other security partners that they can count on America's security commitments.
a) Project power despite anti-access/area denial challenges
b) Maintain a safe, secure, and effective nuclear deterrent
c) Deter and defeat aggression
d) Provide a stabilizing presence
433. The _____ exercise ADCON through their respective Service Chiefs over the Service.
a) Chairman of the Joint Chiefs of Staff
b) Functional Combatant Commanders
c) Secretaries of the Military Departments
d) Combatant Commanders
434. Technology is often applied against what common analyst concern?
a) Information overload
b) CCIR management
c) Subjective assessments
d) Replacing cross staff collaboration
435. Which of the following statements highlights the critical features of intelligence?
a) Allows anticipation or prediction of future situations and circumstances
b) Provides raw, factual information on a wide variety of subjects
c) Informs decisions by illuminating the differences in available courses of action
d) Contributes to or shapes the commander’s decision making process
436. Analysis is a synthesis of quantitate analysis and qualitative judgement and therefore rarely subject to competing interpretations.
437. What is the primary role of the joint force J2?
a) To inform the commander
b) To analyze data
c) To collect data and relate data from a wide spectrum into usable information
d) To manage collection assets to maximize data collection across the operational environment
438. Commanders use intelligence to _____. (Select all that apply)
a) Support a predictive estimation of the situation
b) Understand adversary capabilities and intentions
c) Visualize and understand all dimensions of the OE
439. Which of the following are true when forming priority intelligence requirements (select all that apply)
a) PIRs are subject for which there is a need to collect information or produce intelligence
b) Staff must be aware of intelligence requirements of higher, adjacent, subordinate and supporting elements
c) The JFC’s PIRs should prioritize the most urgent intelligence requirements.
d) All of the above
440. After intelligence requirements are established, the staff reviews existing databases for answers to requirements. Then, if the intelligence requirement does not exist, the _____.
a) Staff issues a request for information
b) Staff collects information themselves
c) Staff rejects JFC’s PIR
d) JFC refines the PIR to match available intelligence
441. What is the definition of collection requirements management?
a) Matching intelligence collection requirements with appropriate collection capabilities
b) Analyzing the priority intelligence requirements against existing elements of essential information]
c) Matching the commander’s critical information requirements with the other intelligence operations
d) Synchronizes the timing of collection with the operational scheme of maneuver and with other intelligence operations
442. Why does collection planning require the ability to call on a variety of collection sources?
a) To allow flexible tasking of assets
b) To minimize the effects of enemy deception
c) To ensure subordinate units maintain situational awareness of PIRs
d) To provide spare assets on call in event of cancellations
443. Doctrinal, manning, and organizational considerations are what part of the joint intelligence architecture planning process?
a) Systems architecture planning
b) Operational architecture planning
c) Technical architecture planning
d) Logistical architecture planning
444. Intelligence dissemination requirements and procedures must be coordinated through the _____.
a) Communications directorate of the J6
b) Joint force command J3
c) Joint force command J2
d) Joint Collection Management Board
445. What role(s) is responsible for providing maps, charts, digitized products, and precise geodetic coordinates?
a) The Intelligence Officer (J2)
b) The Geospatial Information and Service Officer
c) The Intelligence Analysts and Targeteers
d) The Collection Managers
446. The joint intelligence preparation of the environment (JPOE) consists of four steps.
Step 1 Analyze the adversary and other relevant aspects of the operational environment
Step 2 Describe the impact of the operational environment on the adversary and friendly courses of actions (COAs)
Step 3 Evaluate the capabilities of adversary forces operating in the operational environment
Step 4 Determine and describe potential adversary COAs and civilian activities that might impact military operations
447. Dissemination of information can sometimes be defined by a strategy called Push and Pull. Pull refers to which of the following:
a) Involves direct electronic access to databases, intelligence files, or other repositories by intelligence organizations at all levels
b) Refers to validating information from multiple sources
c) Allows the higher echelons to move intelligence down to satisfy existing lower echelon requirements or to relay other relevant information to the lower level.
d) Indicates information that is pulled from raw data that cannot be validated
448. Intelligence definitions:
g. Warning Intelligence – Focuses on the opportunities to counter and alter only those threats that have detrimental effects for the U.S. (including U.S. military or political decision cycles, infrastructure, COA, or loss of governance). Provides a distinct communication to a decision maker about threats against U.S. security, interests, or citizens; carries a sense of urgency, implying the decision maker should take action to deter or mitigate the threat's impact.
a. Current Intelligence – Involves the integration of time-sensitive, all-source intelligence and information into concise, objective reporting on the current situation in a particular area. Involves the integration of time-sensitive, all-source intelligence and information into concise, objective reporting on the current situation in a particular area.
h. General Military Intelligence – Supports the requirements to quickly respond to differing crisis situations with corresponding intelligence spanning the globe. Focuses on the military capabilities of foreign countries and organizations to include non-state actors, and other topics that could affect potential US or multinational military operations.
f. Target Intelligence - Identifies and nominates specific COGs and HVTs that, if exploited in a systematic manner, will create the desired effects and support accomplishment of the commander’s objectives. Portrays and locates the components of a target or target complex, networks, and support infrastructure, and indicates its vulnerability and relationship to the enemy Centers of Gravity (COG); consists of analysis of physical and virtual attributes and signatures as well as Battle Damage Assessment (BDA) resulting from the application of lethal or non-lethal military force.
b. Scientific and Technical Intelligence - Comprises characteristics, capabilities, vulnerabilities, and limitations of all weapon systems, subsystems, and associated material, as well as related research and development. Examines foreign developments in basic and applied sciences and technologies with warfare potential, particularly enhancements to weapon systems; addresses overall weapon systems, tactics analysis, and equipment effectiveness.
d. Counterintelligence – Analyzes the threats posed by foreign intelligence and security services, and the intelligence activities if non-state actors such as organized crime, terrorist groups, and drug traffickers. Information gathered and activities conducted to identify, deceive, exploit, disrupt, or protect against espionage, other intelligence activities, sabotage, or assassinations conducted for or on behalf of foreign powers, organizations, or persons, or their agents, or international terrorist organizations or activities.
e. Estimative Intelligence – Reaches beyond descriptions of adversary capabilities or reporting of enemy activity to forecast the unknown based on an analysis of known facts using pattern analysis, inference, and statistical probability techniques. Forecasts of current or potential situations with implications for planning and executing military operations; includes a description of relevant actors' capabilities, and reporting of their activities, and it analyzes known factors using techniques such as pattern analysis, inference, and statistical probability to address unresolved variables.
c. Identity Intelligence – Results from the fusion of identity attributes (biologic, biographic, behavioral, and individuals) and other information and intelligence associated with those attributes collected across all intelligence disciplines. Results from the fusion of identity attributes (biologic, biographic, behavioral, and reputational information related to individuals) and other information and intelligence associated with those attributes collected across all intelligence disciplines.
449. What level of intelligence is produced for the President, Congress, Secretary of Defense, senior military leaders, and combatant commanders?
b) National strategic
c) National security
d) Theater strategic
450. An intelligence report is received by the JFC detailing the capabilities and safe houses of an extremist group operating in its area of regard. What type of intelligence does this represent?
a) Tactical intelligence
b) Theater strategic intelligence
c) Operational intelligence
d) Human intelligence
451. To be successful, a joint force commander must be able to influence and coordinate a diverse coalition of joint and multinational forces as well as civilian agencies and groups. What are some of the civilian groups the FRC must consider? Select all that apply.
a) Nongovernmental organizations
b) State and local militias
c) Multinational forces
d) Host nation agencies
452. Prior to planning for operations in support of the JFC OPLAN, a briefing is presented to the planning staff concerning the environmental conditions, layout of adversarial forces and their relationship with rural communities and leaders, as well as the history of relationship between the local population and foreigners. Which one of the ten principles of intelligence does this represent?
453. Assuming the truism that intelligence is imperfect, what is the best way to minimize the obstacles to achieve a high degree of fidelity in the products of intelligence?
a) Anticipating the changing operational environment and focusing collection efforts to support ongoing operations54.
b) Collaborating with allies and coalition partners who posses niche expertise and alternative perspectives that compliment joint force intelligence environment
c) Staffing efforts to achieve a mix of skills and characteristics that enable them to remain responsive to a changing environment
d) Constantly strive to maintain the highest possible standards of excellence
454. Which of the following intelligence principles is described as the process of collecting and examining information from available sources and intelligence disciplines to derive as complete an assessment as possible.
b) Unity of effort
455. Principles of intelligence:
Synchronization – Requires that all intelligence sources and methods be applied in concert with the operations plan and operations order.
Prediction – Vulnerable to incomplete information and adversary deception, but should never be avoided because it helps JFCs determine enemy intentions and capabilities.
Collaboration – Relies on unhindered access to and sharing of all relevant information and can take many forms such as competitive analysis, brain storming, and federation.
Fusion - Relies in a finished intelligence product that provides the most accurate and complete picture possible of what is known about an activity.
456. Identify the national intelligence member that has overall responsibility for intelligence support to the President and the day-to-day management of the intelligence community.
a) Director of the Central Intelligence Agency
b) Under Secretary of Defense for Intelligence
c) Director of National Intelligence
d) Director of the Defense Intelligence Agency
457. Which of the following national intelligence leadership positions advises the Secretary of Defense and Deputy Secretary of Defense, Chairman of the Joint Chiefs of Staff, combatant commanders (CCDRs), and USD(I) on all matters concerning military and military-related intelligence?
a) Director of the Defense Intelligence Agency
b) Under Secretary of Defense for Intelligence
c) Director of National Intelligence
d) Joint Staff Directorate for Intelligence, J2
458. Which of the following intelligence communities is responsible for providing intelligence support in areas such as human factors analysis, counterterrorism, personal recovery, and noncombatant evacuation operations?
a) Defense Intelligence Agency (DIA)
b) National Security Agency (NSA)
c) Central Intelligence Agency (CIA)
d) Central Security Service (CSS)
459. Which of the following non-DoD intelligence communities supports HUMINT collection, all source analysis, and political, economic, and biographic intelligence?
a) Department od State (DOS) Bureau of Intelligence and Research
b) Department of Energy (DOE)
c) Federal Bureau Investigation (FBI)
d) Central Intelligence Agency (CIA)
460. The _____ is the primary intelligence organization that provides support to the combatant commands at the operational and tactical levels.
a) National Intelligence Support Team (NIST)
b) Joint Intelligence Operations Center (JIOC)
c) Defense Joint Intelligence Operations Center (DJOC)
d) Joint Intelligence Support Element (JISE)
461. The intelligence component of the National Joint Operations and Intelligence Center (NJIOC) provides planning, management, and infrastructure for intelligence working groups and intelligence task forces that provide direct intelligence support during major conflicts.
462. JIPOE Steps:
DIA – Intelligence support provided includes, but is not limited to, all-source military analysis, human factors analysis, HUMINT, MASINT, MEDINT, CI, counterterrorism, chemical, biological, radiological, and nuclear counterproliferation, counterdrug operations, and personnel recovery
NSA/CSS – A unified organization that provides for the SIGNIT mission of the U.S. to ensure the protection of national security systems for all departments and agencies of the U.S. Government
NGA – Provides timely, relevant and accurate GEOINT support to IMINT, geospatial information, national imagery collection management, commercial imagery, imagery-derived MSAINT, and some meteorological and oceanographic data and information
NRO – Responsible for integrating unique and innovative space-based reconnaissance technologies and the engineering, development, acquisition, and operation of space reconnaissance systems and related intelligence activities
463. Joint intelligence planning supports joint operation planning and results in the production of what three products?
a) Dynamic Threat Assessment
b) Annex B: Intelligence
c) Contingency Plan
d) National Intelligence Support Plan
464. Advance scouts report that a key bridge crossing is being defended by two tank platoons supported by a reinforced infantry brigade. Which of the following type of intelligence does this represent?
d) Theater strategic
465. What principle of intelligence is most susceptible to incomplete information and enemy deception efforts?
466. This intelligence product category forecasts current or potential situations with implications for planning and executing military operations.
a) Target Intelligence
b) Current Intelligence
c) Estimative Intelligence
d) Warning Intelligence
467. Which of the following are tasks that the J2 performs? (Select all that apply.)
a) Assesses the characteristics of the adversary's decision-making process and identifies weaknesses that may be exploited
b) Produces threat assessments on a continuing basis to help the commander create or exploit opportunities to accomplish friendly force objectives
c) Analyzes the adversary and other relevant aspects of the operational environment
d) Ensures that critical intelligence is disseminated appropriately in a timely manner to the joint force commanders (JFCs), staff, and components
468. The JTF J2 should have personnel knowledgeable in foreign disclosure policy and procedures and should obtain necessary foreign disclosure authorization from DIA as soon as possible.
469. Which of the following roles must be well versed with timelines required to complete a required product and able to obtain the aid of external resources in acquiring needed intelligence?
a) J2 Collection Manager
b) Intelligence Analysts
470. Collection activities acquire and extract data from the operational environment such that Processing and Exploitation can convert that data into information to be used during Analysis and Production to refine into _____ to satisfy Requests for Information (RFI) or the commander's Priority Intelligence Requirements (PIR).
c) data fee
471. What two features distinguish intelligence from information?
a) Allows anticipation or prediction of future situations and circumstances
b) Contributes to or shapes the commander's decision making process
c) Consists of the synthesis of quantitative analysis and qualitative judgment with an assigned degree of coincidence to the analytical conclusion
d) Provides raw, factual information on a wide variety of subjects
472. The Commander's Critical Information Requirements represent both Friendly Force Information requirements and _____, which are derived from the intelligence organization and vetted across staff.
a) identified collection gaps
b) mission analysis identified requests for information
c) priority intelligence requirements (PIR)
d) threat assessments
473. Military operations vary in scope, purpose, and _____ across a range that spans from military engagement to major operations and campaigns.
a) Conflict intensity
b) End state
c) Expected outcome
474. _____ is the protection of U.S. sovereignty, territory, domestic population, and critical defense infrastructure against external threats and aggressive or other treats as directed by the President.
a) Civil support
b) Peace operations
c) Homeland defense
d) Combating terrorism
475. By arranging operations and activities into phases, the JFC can better integrate and _____ subordinate operations in time, space, and purpose.
476. Which of the following are effective means to achieve deterrence? (Select all that apply.)
a) Foster a climate of peaceful cooperation
b) Ensure joint operations forces are ready to conduct decisive operations
c) Develop a Security Cooperation Plan
d) Remove forces from area
477. _____prevents an adversarial action by presenting a credible threat of counteraction. This activity can occur during both peace and war.
c) Foreign humanitarian assistance
d) Security cooperation
478. Which of the following statements accurately reflect crisis and limited contingency operations? (Select all that apply,)
a) Are part of the JFC’s OPLAN
b) Are used to restore stability in a nation where internal conflict threatens regional stability
c) Must achieve a very specific or operational objective
d) Are conducted to achieve tactical objectives
479. Executive Order 12656, Assignment of Emergency Preparedness Responsibilities, delegates DoD to advise and assist DOS in preparing and implementing plans for _____.
a) Non-combat evacuation
b) Foreign internal defense
c) Foreign humanitarian assistance
d) Military support
480. A(n) _____, such as foreign humanitarian assistance, can be a major operation if the combination of size, scope, and duration requires the commander to phase the operation as a set of tasks, activities, and missions over time.
b) Noncombat operation
d) Combat operation
481. To achieve military strategic objectives quickly and at least cost, JFCs normally will seek the earliest opportunity to conduct decisive _____ operations.
482. Which of the following are some of the key elements of the shape phase of joint operations? (Select all that apply.)
a) Organizing and training
b) Conduct of rehearsals
c) Stability operations
d) Balance and simultaneity
483. _____ contributions provide operational leverage by gathering critical information, undermining a potential adversary’s will or capacity to wage war, and enhancing the capabilities of conventional U.S. or multinational forces.
484. The “Seize the Initiative” phase of joint operations seeks decision advantage by using all available elements of combat power to: (Select all that apply.)
a) Seize and maintain the initiative
b) Deny the enemy the opportunity to achieve its objectives
c) Generate in the enemy a sense of inevitable failure and defeat
d) Denounce enemy military by using propaganda to turn public against their military or leadership
485. When JFCs consider incorporating combinations of contiguous and noncontiguous AOs with linear and nonlinear operations, they chose the combination that fits the operational environment and the purpose of the operation. Which of the following combinations describes a typical sustained offensive and defensive operation against powerful, echeloned, and symmetrically organized forces combat power and protects sustainment functions?
a) Linear operations in contiguous AOs
b) Linear operations in noncontiguous AOs
c) Nonlinear operations in contiguous AOs
d) Nonlinear operations in noncontiguous AOs
486. During stability operations, it is critical to avoid inadvertently legitimizing an individual or organization in a country where no government exists.
487. During the enable civil authority phase of operations, the JFC may be required to transfer responsibility of operations to another as the termination criteria.
488. Using the following image of the Joint Operations Phasing Model, provide a response (Deter, Dominate, Enable, Seize, Shape, or Stabilize) for each of the phases below labeled "1" through "6".
a) Phase 1: Deter
b) Phase 2: Seize
c) Phase 3: Stabilize
d) Phase 4: Dominate
e) Phase 5: Enable
f) Phase 6: Shape
489. Identify the term (Deter, Dominate, Enable, Seize, Shape, or Stabilize), that corresponds to each of the definitions below.
a) This phase, while preparatory in nature, may include mobilization and initial deployment into a theater. Deter
b) This phase includes denying the enemy its initial objectives. Seize
c) This phase may require the joint force to perform limited local governance, and integrate the efforts of other supporting inter-organizational partners until legitimate local entities are functioning. Stabilize
d) This phase's success depends on overmatching enemy capabilities at the critical time and place. Dominate
e) This phase is focused on helping the civil authority stabilize and begin to administer services to the populace. Enable
f) This phase is executed continuously, and may mitigate conditions that could lead to a crisis. Shape
490. A _______ may be appropriate when the contemplated military operations exceed the scope of a single major operation.
c) large-scale combat operation
d) strategic objective
491. Campaigns are _____.
a) the most extensive of joint operations
b) service oriented
c) independently embarked on
d) low in resource requirements
492. Establishing and maintaining access to operational areas where joint forces are likely to operate is an action in the _____ phase.
493. _____ generally are governed by various directives and agreements and do not require a joint operation plan (OPLAN) or operation order (OPORD) for execution.
a) Advance measures
b) Continuity of operations
c) Commitment of forces
d) Engagement activities
494. If the crisis is caused by a(n) _____ that threatens regional stability, U.S. forces may intervene to restore or guarantee stability.
b) credible threat
c) internal conflict
d) external threat
495. Operation RESTORE HOPE in Somalia was a crisis response operation which required _____ to protect U.S. forces while accomplishing the mission.
a) combat operations
b) deterrence activities
c) security cooperation
d) major campaigns
496. _____ ensure(s) DoD processes, procedures, and resources are in place to support the President and Secretary of Defense in a national security emergency.
a) Commitment of forces
b) Engagement activities
c) Continuity of operations
d) Advance measures
497. _____ is DoD support to U.S. Government actions that plan for, prepare for, respond to, and recover from the effects of domestic and foreign chemical, biological, radiological, and nuclear incidents.
a) Civil support
b) Recovery operations
c) Chemical, biological, radiological, and nuclear consequence management
d) Homeland defense
498. _____ contain conflict, redress the peace, and shape the environment to support reconciliation and rebuilding and facilitate the transition to legitimate governance.
a) Peace operations
b) Recovery operations
c) Stability operations
d) Foreign humanitarian assistance
499. _____ is/are DoD's unified effort to support and augment the development of the capacity and capability of foreign security forces and their supporting institutions to facilitate the achievement of specific objectives shared by the U.S. Government.
a) Foreign humanitarian assistance
b) Security force assistance
c) Civic assistance programs
d) Stability operations
500. _____ operations can include the provision of emergency infrastructure reconstruction.
501. The scope of a(n) _____ or limited contingency operation is by its nature different in scope than a full-scale operation.
a) crisis response
b) peacekeeping operation
502. Executive Order 12656, Assignment of Emergency Preparedness Responsibilities, delegates DoD to advise and assist DOS in preparing and implementing plans for _____.
a) foreign humanitarian assistance
b) non-combat evacuation
c) foreign internal defense
d) military support
503. _____ is generally limited in scope and duration because it is intended to supplement or complement efforts of civil authorities or agencies with the primary responsibility for providing assistance.
a) Civil defense
b) Foreign internal defense
d) Foreign humanitarian assistance
504. To achieve military strategic objectives quickly and at least cost, JFCs normally will seek the earliest opportunity to conduct decisive _____ operations.
505. _____ contributions provide operational leverage by gathering critical information, undermining a potential adversary's will or capacity to wage war, and enhancing the capabilities of conventional U.S. or multinational forces.
506. U. S. Forces may be required to engage in several types of joint operations simultaneously, across a range of military operations. Commanders combine and sequence offensive, defensive, and _____ operations to achieve objectives.
b) crisis response
507. Supporting the conditions for economic reconstruction is an action in the _____ phase.
508. When JFCs consider incorporating combinations of contiguous and noncontiguous AOs with linear and nonlinear operations, they choose the combination that fits the operational environment and the purpose of the operation. Which of the following combinations describe a typical sustained offensive and defensive operation against powerful, echeloned, and symmetrically organized forces and where the forward line of own troops focus combat power and protect sustainment functions?
a) linear operations in noncontiguous AOs
b) nonlinear operations in contiguous AOs
c) nonlinear operations in noncontiguous AOs
d) linear operations in contiguous AOs
509. _____ are DoD activities, normally in support of the United States Agency for International Development or the Department of State, conducted outside the U.S., its territories, and possessions, to relieve or reduce human suffering, disease, hunger, or privation.
a) Stability operations
b) Civil support
c) Foreign humanitarian assistance
d) Foreign internal defense
510. Military engagement occurs as part of _____, but also extends to interaction with domestic civilian authorities.
a) civil defense
c) security cooperation
511. If the crisis revolves around _____ to a regional partner, combat commanders employ joint forces to deter aggression and signal U.S. commitment
a) internal conflict
b) credible threats
c) coup d'etat
d) external threats
512. Joint Logisticians coordinate sustained logistic readiness through the integrating functions of _____.
a) Translating strategic guidance, developing operational concepts, and assessing logistic plans
b) Planning, executing, and controlling joint logistic operations
c) Unity of effort, environment-wide visibility, and rapid and precise response
d) Organizing for execution, achieving situational awareness, and designating lead Service responsibilities
513. Which of the following key global providers is responsible for recruiting, organizing, supplying, and maintaining ready forces for deployment?
b) Defense Logistics Agency (DLS) Service
c) Joint Staff
514. Which of the following joint logistic imperatives links the mission, commander’s intent, and operational objectives to core logistic capabilities, procedures, and organizations?
515. Which of the following statements describes the “supply” functional capability within joint logistics?
a) The joint logistician manages supplies and equipment, inventory, and supplier networks
b) The joint logistician manages people, material, and transportation
c) The join logistician balances Commander’s Critical Information Requirements (CCIRs) with risk, force availability, and unit readiness.
d) The logistician develops plans, studies, feasibility, and identifies who is responsible for executing the plan.
516. The purpose if field maintenance operations is to repair, modify, rebuild, and overhaul both entire systems and components and is directly linked to life cycle systems readiness.
517. Which statement describes the difference between the responsibilities of the supported combatant commander (CCDR) and the supporting CCDR?
a) The supported CCDR establishes a collaborative process, whereas the supporting CCDR determines preemployment standards.
b) The supported CCDR regulates the transportation flow of support personnel, whereas the supporting CCDR regulates the force flow based on strategic, operational, and tactical control.
c) The supported CCDR builds and validates force and movement requirements, whereas the supporting CCDR reports force movement requirements data.
518. Match each core capability with the correct description.
Use the following terms to answer questions 1 - 7 below: Logistics Services; Operational contract Support; Health Services Support; Deployment and Distribution; Supply; Maintenance Operations; or Engineering Operations.
Question 1: ______ provides managed materiel inventories that are determined through deliberate collaboration with maintenance and distribution providers to optimize the end effect of the supply chain to the warfighter. Supply
Question 2: ______ provides life cycle systems readiness capability that enables the requirements, acquisition and sustainment communities to provide systems with optimal availability and reliability to the joint warfighter at best value to the Services. Maintenance Operations
Question 3: ______ supports the materiel movement during logistical sustainment of operations. Deployment and Distribution
Question 4: ______ promotes individual practices that prevent or correct any human condition that would impair or preclude the joint force from achieving its objectives. Health Services Support
Question 5: ______ force multiplier that helps commander integrate, synchronize and direct operations. Engineering Operations
Question 6: ______ comprised of disparate activities that enable the global sustainment for military forces. Logistics Services
Question 7: ______ensures that the Service is augmented by military and government sources of support, that the support is orchestrated and manage and that visibility is maintained. Operational Contract Support
519. Within the Personnel Services Division, which support organization is responsible for maintaining personal data of Service members related to their employment?
a) Financial Management
b) Religious Ministry
c) Human Resources
d) Legal Support
520. Which two of the following describe J1 functions? (Select all that apply)
a) The J1 participates in all applicable planning and assessment process
b) The J1 advises joint logistic requirements and requires various nongovernmental organizations (NGOs) to support all of these
c) The J1 coordinates with higher, supporting, and subordinate manpower and personnel directories
521. Once a Mission is defined by the SecDef, the joint task force (jtf) headquarters identifies its personnel requirements. These requirements are summarized in the _____.
a) Global Force Management Plan
b) Concept of Operations (CONOPS)
c) Joint Manning Document
d) Operation Plan (OPLAN)
522. The President and SecDef are responsible for assigning forces to specified combatant commands.
523. Who is responsible for the organization and employment of legal personnel assigned or attached to a joint task force (JTF) headquarters?
a) Joint Force Commander
b) Staff Judge Advocate
d) Geographic Combatant Commander
524. Staff Judge Advocates (SHAs) are responsible for _____/ (Select all that apply)
a) Developing the organizational structure for their sections
b) Understanding the legal support requirements of the joint task force (JTF) to which they are assigned
c) Identifying the personnel requirements for their sections
d) Operating on a sustained 24-hour battle rhythm
525. The responsible personnel for Global Force Management Process 1 – Assignment is:
b) SecDef and Secretaries of Military Departments
c) Chairman of Joint Chiefs of Staff
526. The responsible personnel for Global Force Management Process 2 – Appointment is:
b) SecDef and Secretaries of Military Departments
c) Chairman of Joint Chiefs of Staff
527. The responsible personnel for Global Force Management Process 3 – Allocation is:
b) SecDef and Secretaries of Military Departments
c) Chairman of Joint Chiefs of Staff
528. An environment in which operations may or may not be opposed at any point during deployment by forces or individuals not under the host government’s control in a/an _____environment.
529. Which stage of the protection process assembles and organizes national resources to support national objectives in time of war or any other emergency?
a) Joint reception, staging, onward movement, and integration (JRSOI)
530. Who is responsible for assigning forces and resources to combatant commands?
a) Supporting Combatant Commander
b) Commander, Joint Chief of Staff
c) Supported Combatant Commander
531. Who is responsible for organizing, training, equipping, and providing administrative and logistic support for forces?
b) Military Departments
c) Chairman of the Joint Chiefs of Staff (CJCS)
d) Supported Combatant Commander (CCDR)
532. Which of the following are phases of the deployment process? (Select all that apply)
a) Deployment planning
c) Redeployment activities
533. Which of the following reception, staging, onward movement, and integration (JRSOI) elements are defined as “enabling”? (Select all that apply.)
a) Force protection
b) Multinational support
c) Contract support
d) Legal support
534. Redeployment encompasses which of the following phases? (Select all that apply.)
b) Redeployment activities
d) Joint reception, staging, onward movement, and integration (JRSOI)
535. Which of the following are issues considered during redeployment planning? (Select all that apply.)
a) Intelligence preparation
c) Infrastructure assessment
d) Force health protection
536. Which of the following is described as the quality or capability of military forces that permits them to transition from place to place while retaining their ability to fulfill their primary mission?
537. The purpose of the personnel estimate is to _____. (Select all that apply.)
a) identify the most appropriate forces that best meet the SecDef's requirements
b) apportion forces to the combatant commander
c) develop the most effective solution to a problem
d) collect and analyze relevant information
538. The movement phase of deployment is comprised of which of the following three segments?
a) POE operations
b) maintain, repair, or sustain equipment
c) POE to port of debarkation (POD)
d) origin to air or sea ports of embarkation (POE)
539. Which of the following is described as the ability to project the military instrument of national power?
a) Global force management
b) Operation plan (OPLAN)
c) Concept of operations (CONOPS)
d) Global force projection
540. Which of the following are phases of the deployment process? (Select all that apply.)
a) Deployment planning
c) Predeployment activities
541. Which of the segments of joint reception, staging, onward movement, and integration (JRSOI) is defined as the process of offloading, marshalling, and transporting personnel, equipment, and materiel?
d) Onward movement
542. During which phase of projection are forces and materiel transferred to support another joint force commander's operational requirements?
b) Joint reception, staging, onward movement, and integration (JRSOI)
543. The operational environment is generally described by which of the following conditions?
a) tolerant, liberal, and autocratic
b) foreign, native, and unrestricted
c) strategic, tactical, and dictated
d) permissive, uncertain, and hostile
544. Which of the segments of joint reception, staging, onward movement, and integration (JRSOI) is defined as the process of synchronizing the transfer of capabilities into an operational commander's force?
b) Onward movement
545. When identifying support activities during pre-redeployment, redeploying forces _____.
a) perform all personnel, supply, and inspection activities
b) confirm readiness and available movement dates
c) must be supported with medical care, life support, supplies, and materiel
d) may move to a designated staging area to prepare
16) The purpose of field maintenance operations is to repair, modify, rebuild, and overhaul both entire systems and components and is directly linked to life cycle systems readiness.
17) Which of the following types of plans describes the most probable outcomes of a mission and identifies force requirements?
a) Operation plan (OPLAN)
b) Crisis Plan
c) Concept of operations (CONOPS)
d) Contingency Plan
18) The joint logistics environment (JLE) exists within the _____ environment and consists of _____ that affect the employment of logistic capabilities.
a) strategic; authorities, logistic providers, and imperatives
b) strategic; operation plans, service capabilities, and climates
c) operational; conditions, circumstances, and influences
d) tactical; situations, provisions, and restrictions
19) Who is responsible for the organization and employment of legal personnel assigned or attached to a joint task force headquarters?
a) Joint Force Commander
b) Geographic Combatant Commander
c) Staff Judge Advocate
20) While employed, the Staff Judge Advocate ensures that the joint force commander understands the _____.
a) requirements from host nations for a transparent legal environment in which to conduct joint operations
b) laws, treaties, and agreements that apply to U.S. relations with the foreign governments and their inhabitants
c) cultures and religious beliefs that impact U.S. relationships with the foreign inhabitants
d) traffic laws and ports of entry requirements that impact transportation of personnel and materiel into the foreign nation
21) Which stage of the projection process is identified by the movement of forces within the operational areas (OAs), the positioning of forces into a formation for battle, or the relocation of forces and materiel to a different OA?
22) During the joint reception, staging, onward movement, and integration (JRSOI) phase of redeployment, destination reception refers to _____.
a) preparing the force for the next crisis
b) recovering the unit's assigned personnel and equipment
c) tracking the force to determine exact location of personnel, equipment, and materiel
d) transporting forces via a common user or commercial lift from a port of debarkation (POD) to a demobilization station
23) Which of the following describe the Chairman of the Joint Chiefs of Staff's (CJCS's) responsibilities? (Select all that apply.)
a) Monitors the capabilities of United States Transportation Command (USTRANSCOM)
b) Prescribes a movement priority system to ensure responsiveness to meet the needs of the combatant commander (CCDR)
c) Prepares joint logistic and mobility plans to support joint operation plans (OPLANS)
d) Reviews the CCDR's plans and programs to determine adequacy, consistency, acceptability, and feasibility to perform the assigned mission
24) Which statement describes the difference between the responsibilities of the supported combatant commander (CCDR) and the supporting CCDR?
a) The supported CCDR establishes a collaborative process, whereas the supporting CCDR must prioritize mission, align forces, and consider planned theater distribution.
b) The supported CCDR ensures units retain visibility and mobility, whereas the supporting CCDR determines predeployment standards.
c) The supported CCDR builds and validates force and movement requirements, whereas the supporting CCDR reports force movement requirements data.
d) The supported CCDR regulates the transportation flow of support personnel, whereas the supporting CCDR regulates the force flow based on strategic, operational, and tactical control.
25) Which three of the following when combined are some of the functions that comprise core capabilities of joint logistics?
a) battle rhythm
c) situational awareness
d) maintenance operations
e) health service support
26) Within the Personnel Services Division, which support organization is responsible for maintaining personal data of Service members related to their employment?
a) Human Resources
b) Religious Ministry
c) Legal Support
d) Financial Management
All Introduction to Global Law I Lectures with notes summarized (38 pages)
• Lecture 1: Primary and secondary rules, H. L. A. Hart, chain of authority, rule validity.
• Lecture 2: What is a legal system, a legal tradition and international law, civil law & common law, sovereignty, separation of powers, jurisdiction of courts, level of courts, sources of law/validity, structure of legislation.
• Lecture 3: Types of law, public and private law, Legal subjects, legal acts and legal things.
• Lecture 4: Types of legislation, parts of legislation, methodology.
• Lecture 5: Strategies of interpreting legislation (and conflicts with it)
• Lecture 6: Types of case judgement, parts and structure of a judgment
• Lecture 7: Elements of reasoning with precedent (earlier decisions)
• Lecture 8: Types, conflicts and strategies of legal reasoning
• Lecture 9: The circulation and spread of legal institutions (and its challenges), class assignments and ANP-Approach.
• Lecture 10: Private and Public, subjects and purpose international law, how does it work, is it law? Global law, ANP-approach. Lex lata (the law as it exists, current law), lex feranda (the law as you want it to be, should be, future law), lex specialis (law governing a specific subject matter) trumps lex generalis (general law), lex mercatoria (merchant law, trade law, Commercial law used by merchants, it’s about trade).
• Lecture 11: When is a state a state, what does a subject of international law have, how do you become a state, self-determination. Uti possidetis (that which is possessed).
• Lecture 12: Sources of international law, treaties, ratification, reservations, customary international law, opinio juris sive necessitas (an action is carried out as a legal obligation, a practice must be followed because of the rule of law requiring it), general principles, sources, hierarchy of norms, ius cogens (peremptory norm, no derogation permitted, automatically binding). Pacta sunt servanda (nonfulfillment of obligations towards another party is a breach of pact).
• Lecture 13: Types of jurisdiction, state (officials) immunity, Vienna Convention, diplomatic asylum, sanctions. Jure imperii (acts of state), jure gestionis (acts of non-governmental organisations), persona non grata (foreign person whose entering or remaining in a particular country is prohibited by that country's government), forum prorogatum (If a State has not recognized the jurisdiction of the Court at the time when an application is filed against it, that State has the possibility of accepting such jurisdiction subsequently: the Court has jurisdiction as of the date of acceptance).
• Lecture 14: State responsibility & (settlement of) wrongful acts, consequences & countermeasures, UN Chapter VI, ICJ.
• Lecture 15: Jus ad bellum (before engaging in war) & jus in bello (the conduct of parties engaged in an armed conflict), use of force (breaches & exceptions), International Humanitarian Law, combatants & civilians. Erga omnes (rights and obligations owed toward all), ultra vires (off duty, outside of their official authority), force majeure (superior force, a clause in contracts that frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control prevents one or both parties from fulfilling their obligations under the contract), ratione temporis (temporal jurisdiction, refers to the jurisdiction of a court of law over a proposed action related to the passage of time (has the deadline for litigation expired?).
• Lecture 16: International Organisations, the UN, Security Council, General Assembly, International Economic Law, Bilateral Investment Treaties, WTO. Sui generis (of its own kind, unique).
• Lecture 17: International Human Rights law, (Universal Declaration of) Human Rights, treaties after ratification, Group Rights, Refugee Law, International Criminal Law, right to have rights. Mens rea (one had the intention to commit a crime).
ECO 372 final exam (Already graded A )
ECO 372 final exam
As a country develops economically, what changes usually take place in the goods it exports?
Exports go from being diversified to being specialized in whatever the country finds to its comparative advantage.
Raw materials and agricultural products decline in importance and are replaced by services and manufactured goods.
Services and manufactured goods decline in importance and are replaced by raw materials and agricultural products.
There is little change because comparative advantage does not change.
According to the Classical growth model, an economy that increases its saving will grow:
Quickly since the increase in saving will permit more rapid technological progress.
Slowly because consumption and aggregate demand will be reduced.
Quickly since the increase in saving will permit greater investment.
Slowly because interest rates will fall, causing investment to decline.
Central banks are responsible for:
Neither monetary policy nor fiscal policy
Both monetary policy and fiscal policy
Monetary policy but not fiscal policy
Fiscal policy but not monetary policy
News Story: Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is weak and GM cars aren\'t selling well. GM isn\'t sure when the plant will reopen. What type of unemployment describes the workers\' situation?
If a country wants to prevent its exchange rates from falling, it could:
Place restrictions on imports
Pursue easier monetary policy
Remove restrictions on imports
Remove any subsidies on exports
U.S. imports involve an:
Outflow of dollars from the United States to foreigners
Outflow of foreign currency from the United States to foreigners
Inflow of foreign currency from foreigners to the U.S. economy
Inflow of dollars from foreigners to the United States economy
If the reserve requirement is 20 percent, and banks keep no excess reserves, an increase in an initial inflow of $100 into the banking system will cause an increase in the money supply of:
According to Keynes, why might deflation create problems for an economy?
People would drop out of unions because unions would become ineffective at keeping wages of members high.
In expectation of increased spending, too many entrepreneurs would begin businesses and most would fail.
Consumers might expect prices to fall further and cut back consumption now.
The cost of repricing goods would increase costs, and therefore reduce profits, for businesses and they would cut production.
Between 2007 and 2009, the U.S. unemployment rate rose from under 5 percent to over 8 percent. A Keynesian economist would most likely blame this increase in unemployment on:
An increase in the minimum wage.
A decline in aggregate supply.
A decline in the level of aggregate demand.
An increase in the bargaining power of labor unions.
Suppose farmers can use their land to grown either wheat or corn. The law of supply predicts that an increase in the market price of wheat will cause:
Farmers to raise the production of corn and wheat.
Farmers to substitute corn for the production of wheat.
Farmers to substitute wheat for the production of corn.
Farmers to lower the production of corn and wheat.
The interest rate is the price paid for use of a:
How do investment in technology and investment in capital differ?
They have different effects on output because of the positive externalities associate with investments in technology.
They have different effects on output because of the positive externalities associated with investments in capital.
They have the same effects on output but investments in technology are much more closely tied to the level of saving than investments in capital.
They have similar effects on output so they have no important differences from an economic point of view.
An analysis of economic reality that proceeds from the parts to the whole.
The study of pricing policies of firms and the purchasing decisions of households.
The study of aggregate economic relationships.
The study of individual choice and how that choice is influenced by economic forces.
Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model?
A reduction in government spending
No change in taxes or government spending
An increase in taxes
An increase in government spending
According to Keynes, market economies:
May recover slowly after they experience a significant decline in aggregate demand.
Are constantly experiencing significant declines in aggregate demand.
Never experience significant declines in aggregate demand.
Quickly recover after they experience a significant decline in aggregate demand.
What would make foreigners want to buy more from the United States?
Inflation in the United States
Higher interest rates in the United States
A fall in the value of the dollar in the foreign exchange market
Globalization that allows governments to pursue expansionary policies can be dangerous because it can lead to:
Goods price inflation
Goods price deflation
Asset price inflation
A reduction in the debt ceiling
Which of the following types of unemployment is considered to be the most controllable through demand-side macroeconomic policy?
Which of the following topics is best characterized as a macroeconomic issue?
The effect of a drought on the price of corn
The decision by Apple to produce fewer Macintosh computers
The effect of an increase in federal spending on the unemployment rate
The choice a student makes in selecting college course
The law of demand states that quantity demanded of a good is inversely related to the price of that good. Therefore, as the price of a good goes:
Down, the quantity demanded goes down.
Up, the quantity demanded goes down.
Up, the quantity demanded also goes up.
Down, the quantity demanded stays the same.
Quotas and tariffs can:
Have the same effect on the price of domestically produced goods if they are set appropriately.
Yield the same amount of tax revenue if they are set appropriately.
Never have the same effect on imports and import prices.
Both increase international trade by the same amount if set appropriately.
The depreciation of currency will:
Worsen a country\'s comparative advantage.
Improve a country\'s comparative advantage.
Balance a trade surplus.
Have no impact on a country\'s comparative advantage.
When interest rates rise, people are:
Less likely to borrow, that is, purchase a financial asset.
Less likely to borrow, that is, sell a financial asset.
More likely to borrow, that is, purchase a financial asset.
More likely to borrow, that is, sell a financial asset.
The largest expenditure component of GDP is:
If income increases more rapidly than expected, then:
Tax revenues will be lower than expected.
The budget is less likely to be in surplus.
Estimates of the target rate of employment are likely to increase.
Spending on income-support programs will likely be lower than expected.
Which of the following is the path through which contractionary monetary policy works?
Money down implies interest rate up implies investment up implies income down.
Money down implies interest rate up implies investment down implies income down.
Money down implies interest rate down implies investment up implies income down.
Money down implies interest rate down implies investment down implies income down.
If banks hold excess reserves whereas before they did not, the money multiplier:
Will be unaffected
Will become larger
Will become smaller
Might increase or might decrease
In which of the following situations is a budget surplus most likely to occur?
When fiscal policy is expansionary
When the economy is contracting
When fiscal policy is expansionary and the economy is contracting
When fiscal policy is contractionary and the economy is expanding
MKT 571 WEEK 4 QUIZ
1. What is a simple way to engage in international marketing?
2. Companies are pursuing which objective when they start with prices high and slowly drop them over time?
Focusing on market share
3. Which strategy uses the manufacturer’s advertising, promotion, and other forms of communication to persuade consumers?
4. What type of distribution places the goods or services in as many outlets as possible?
5. Which agreements are not necessarily illegal, but they do violate U. S. law if they tend to lessen competition substantially?
6. What is the practice that allows companies to maximize their market share by believing a higher sales volume will lead to lower unit costs and higher long-run profit while assuming the market price is sensitive?
7. What type of deal takes place when the seller receives some percentage of the payment in cash and the rest in products?
8. What type of marketing channel consists of an independent producer, wholesaler(s), and retailer(s)?
Horizontal marketing system
Conventional marketing system
Vertical marketing system
Rectangular marketing system
9. What takes place when dealers purchase some or all of a product line?
Forcing by brand
10. What mode of entry is it when local and foreign investors share ownership and control?
11. When a seller agrees to accept partial payment of products manufactured with the supplied equipment it is called
free trade agreements
12. Which strategy is appropriate when there is low brand loyalty in a category and brand choice is made in the store?
Side pull strategy
13. What type of marketing system includes the producer, wholesaler(s), and retailer(s) acting as a unified system?
Rectangular marketing system
Vertical marketing system
Triangular marketing system
Horizontal marketing system
14. When companies estimate the demand and costs associated with alternative prices, they will choose the price that produces
negative current profit
break-even current profit
lowest current profit
maximum current profit
15. Which companies have launched a website without any previous existence as a firm?
16. Which marketing system is another channel development in which two or more companies put together resources to exploit an emerging market opportunity?
Vertical marketing system
Conventional marketing system
Strategic marketing system
Horizontal marketing system
17. Which type of distribution relies on some intermediaries willing to carry a particular product?
18. What is an ultimate form of foreign involvement?
19. What type of system does a firm employ to decide about the most critical decisions management faces?
Advertising strategic system
Marketing channel system
20. When the number of intermediaries are severely limited, this means an
21. What form describes a buyer and seller directly exchanging goods with no money and no third party involved?
1) Explain the connection between the US trade deficit and financial capital flows.
2) Explain how comparative advantage determines the pattern of trade. Use an example to aid in your explanation.
3) Explain how the Stolper-Samuelson theorem indicates that free trade will (likely) worsen income inequality in the US, but (likely) narrow it for Mexico.
4) Show the effects on US welfare from each of the following events. a. Imposition of a tariff on a small, perfectly competitive market b. Imposition of a tariff on a small, imperfectly competitive market c. Imposition of a tariff on a large, perfectly competitive market
5) Show the effects on US welfare from each of the following events. a. Imposition of a quota on a small, perfectly competitive market b. Imposition of a quota on a small, imperfectly competitive market
6) If the US is a large importing country and imposes a tariff on the import of a good, what will the welfare effect on the exporting country be?
7) Assume that the US is a large country in the semi-conductor market. If the US is an exporter of the good and experiences a technological improvement, will the US always be better off? Show and explain why or why not.
8) National security demands have made it imperative for the US to close the toilet paper trade gap (just think what would happen in times of war if we couldn’t produce our own!). The government has decided to reduce our imports from 100 million units to 90 million units. As the supreme TP czar, which of the following policies should be chosen? Show and explain why. a. A production subsidy b. A consumption tax c. An import tariff
9) Show why in a competition between the Boeing and Airbus that autarky may be the preferred welfare situation to free trade. Explain how you draw this conclusion. 10) Explain why a VER is likely to generate lower welfare than a quota.
10) Explain why a VER is likely to generate lower welfare than a quota.
11) Explain what constraints the WTO places on US government actions.
12) Explain the advantages and disadvantages of fixed and flexible exchange rates. In your answer, consider the ramifications for fiscal and monetary policy.
13) Explain how trade may reduce pressure for immigration.
14) For each of the following cases indicate the expected change in the equilibrium exchange rate (€/$). Use supply and demand analysis (no credit without the graph). a) an increase in EU interest rates b) a fall in the price level in the US c) an increase in US barriers to imports from the EU
15) Explain why labor unions may wish to oppose international trade. Does this entail that this is a “good” government policy? Explain.
16) Explain why “dumping” is considered to be unfair trade. Does dumping – if unfair or not – cause harm in the dumped upon country? What condition is required for harm to accrue?
17) What is a senescent industry? How is protection for international trade supposed to aid this industry? How is it supposed to aid the country? Under what conditions will the aid actually accrue to the industry and the country?
1) Explain what is meant by “dollarization.” What might lead a country to make this choice for managing its money supply?
2) Explain how a managed float differs from a freely floating (flexible) exchange rate.
3) What are the relative advantages and disadvantages of fixed v. flexible exchange rate systems?
4) For each of the following cases, explain that is the “best” tool for the goal trying to be achieved. Clearly demonstrate why this is the “best” tool. a) The US wishes to contain pollution generated by the consumption of widgets. b) The US wishes to protect jobs in the widgets sector. c) The US wishes to restrain imports in the widgets sector to reduce the trade imbalance with Widgeria.
5) How does the existence of “3-way trades” undermine the usefulness of the supply and demand model of the exchange rate for precisely predicting what the exchange rate will be?
1) Explain how a fixed exchange rate may contribute to a currency crisis? Is any fixed exchange rate subject to this risk?
2) Given the following information where should you invest in order to maximize your return? e = 0.001 $/peso f = 0.0011 $/peso Nominal interest rate in the US = 8% Nominal interest rate in Mexico = 10% Given your investment pattern, how do you expect the variables to evolve over time?
3) What is the Law of One Price? Under what assumptions does the Law of One Price lead to the Purchasing Power Parity model of exchange rates?
4) Suppose that the money supply in the US falls. What will happen to the value of the dollar in the foreign exchange markets? Justify your answer using at least two (2) models of the exchange rate.
1) For each of the following changes, show the direction of shift (if any) for the IS curve. a) An increase in the foreign price level b) A fall in foreign income levels c) An increase in domestic tax rates d) A strengthening of the dollar in the foreign exchange markets e) A collapse in business confidence f) An increase in the money supply
2) For each of the following changes, show the direction of shift (if any) for the LM curve. a) An increase in the domestic price level b) A decrease in the money supply c) A fall in the precautionary demand for money d) A strengthening of the dollar in the foreign exchange markets
University of Phoenix. LAW 421-2 final exam (2019) Already Graded A
1) Which of the following does not result in a decision rendered by the hearing officer?
D. Using expert evaluators
2) Jurisprudence is defined as
A. adjudication of law suits
B. the enactment of laws by a government body
C. the science and philosophy of law
D. the duties and obligations owed by a citizen
3) The state of Kansas has enacted a new law requiring all commercial trucks driving on Kansas roads to have special mud flaps installed. These mud flaps have been proven to make driving in the rain significantly safer due to reduced mist created by trucks driving in the rain, although data regarding accidents and injuries has not yet been determined. Any truck entering Kansas must have these flaps installed or will be subject to a significant fine and delay. The cost for purchase and installation of these flaps is $1,000 per truck. In short, trucks must have these flaps or go around the state. This Kansas law
A. is valid because it only applies to Kansas roads and such a law is entirely intrastate
B. is valid because Kansas\'s right to protect its citizens under its police powers will override any outside challenges to this law
C. is invalid because this law is intended to regulate interstate commerce, an enumerated federal power
D. is invalid because although on its face it\'s an intrastate law, this statute will have a significant economic effect on interstate commerce causing an undue burden
4) The power of preemption is derived from
A. the power of judicial review
B. the Commerce Clause
C. the Necessary and Proper Clause
D. the Supremacy Clause
5) What is the main problem with international courts?
A. Finding judges who understand the complexities of international law
B. Creating a body of law that reflects multiple legal systems
C. Enforcing a ruling on sovereign nations is difficult
D. Lack of recognition from the U.N. and WTO
6) Under the U.S. legal system, subject to some exceptions, costs of litigation regarding both the plaintiff and defendant
A. are all paid by the loser
B. are all paid by the winner
C. are paid for by each side with the plaintiff and defendant paying for their own legal costs
D. are totaled by the court and then for fairness, split in half with each side paying an equal amount
7) Generally, torts law is governed by
A. state statutory law
B. state common law
C. federal statutory law
D. constitutional law
8) Assumption of risk is a defense to
9) The three stripes on Adidas clothing represents a
B. trade dress
C. trade secret
10) The color or shape of an item, if distinctive, is a
B. trade dress
11) Cybersquatting describes the practice of
A. registering multiple domain names and then selling them back to companies at inflated prices
B. hacking into a company\'s website to install a virus or Trojan horse designed to steal information but allow the site to continue operation
C. using mechanical devises to access a company\'s website multiple times to the point that traffic to the site is slowed or blocked
D. hacking into a company\'s website to install a virus designed to cause the company\'s website to totally cease operation
12) The Digital Millennium Copyright Act (1998) provided each of the following protections EXCEPT
A. manufacturers of CD-Writers were required to pay 2% of their sales into a fund to be distributed to copyright holders because the CD-Writers could easily copy music and other copyrighted works
B. civil and criminal penalties were established for those who sell or manufacture products or services that circumvent antipiracy software
C. restrictions were placed on analog recorders and camcorders that lack antipiracy features
D. ISPs were relieved of liability for copyright infringement by their users as long as the ISP had no knowledge of the infringement
13) When Maria comes home from work, she finds that her yard has been mowed and trimmed. An hour later, a man comes to her door to collect payment for the yard work. Maria refuses to pay him because she has never seen him before nor had she hired him to do the work. Which of the following is accurate?
A. This is an implied, unilateral contract, so she must pay.
B. Maria has received unjust enrichment so a quasi contract is formed, so she must pay.
C. The court would make Maria pay the reasonable cost of the work to be fair to both parties.
D. Maria would not have to pay anything.
14) Where a promise can only be accepted by the performance of the person to whom it is offered is an example of a/an
A. bilateral contract
B. unilateral contract
C. implied contract
D. quasi contract
15) Each of the following is a discharge by mutual consent EXCEPT
A. accord and satisfaction
D. frustration of purpose
16) Harry sees an AK-47 automatic assault rifle in a gun shop window. He inquires about the price and is told that it is $2,500. Harry signs a contract promising to pay the $2,500 on Friday, taking possession of the rifle when payment is made. On Thursday, a law is enacted making the ownership, sale, or possession of an automatic rifle illegal. This contract
A. automatically terminates due to impossibility
B. automatically terminates due to impracticability
C. automatically terminates due to frustration of purpose
D. is enforceable and not affected by the new law because it was entered into before the law took effect
17) Which of the following is rarely awarded in contracts cases?
A. Consequential damages
B. Compensatory damages
C. Punitive damages
D. Liquidated damages
18) Which of the following is classified as an equitable remedy?
A. Consequential damages
D. Liquidated damages
19) Which of the following would not be considered tangible?
A. A car
C. The right of ownership
D. The pen or pencil you are using
20) With regard to consideration in a sales contract, the UCC differs from the common law in that
A. consideration in a sales contract may be modified without additional consideration
B. consideration exchanged must be equal or very closely equal in sales contracts
C. consideration is not required in sales contracts
D. consideration in a sales contract may be modified as long as additional consideration is provided
21) The UCC will permit an incomplete or slightly ambiguous contract to be enforced using each of the following criteria EXCEPT
A. past commercial conduct
B. industry standards or norms
C. judicial input of any terms necessary to maintain fairness
D. correspondence or verbal exchanges between the parties
22) Two merchant companies have entered into a contract for the sale of goods but have had no prior dealings, which would establish a course of conduct between them. The UCC will allow gap fillers to apply to their contract regarding missing terms in each of the following situations EXCEPT
A. they have failed to specify when payment for the goods is to be made
B. they have failed to specify where delivery of the goods is to be made
C. they have failed to specify the quality or grade of the goods to be delivered
D. they have failed to specify the price of the goods to be delivered
23) When a buyer rejects nonconforming goods and purchases the appropriate goods from a different seller, this is an example of which of the following:
B. Specific Performance
C. Lawsuit for Money Damages
D. Revoking Acceptance
24) Which of these is not a requirement for disclaiming a warranty?
A. Statutory authorization
B. A conspicuous writing
C. Explaining why the warranty is being disclaimed
D. Including the word merchantability if merchantability is to be disclaimed
25) \"What if everyone took these same actions\" is a question sometimes called the
A. universalization approach
B. utilitarian approach
C. functionality approach
D. morality approach
26) The utilitarian approach to moral philosophy was founded by
A. Jeremy Bentham
B. Immanuel Kant
D. Kenneth Lay
27) Stan is an investment manager. He has received money from various investors with a promise of very high returns on their investments. The invested money is not supplying enough capital in order to pay the returns promised, so he has started using new investor\'s money to pay older investors. By advertising and by word of mouth, people are anxious to invest with Stan because of the money being paid, and with the influx of new investors, he is able to continue operating. Stan is
A. operating an insider trading operation
C. guilty of conspiracy to defraud
D. operating a Ponzi scheme
28) Ben is the manager of a branch of a large bank. He has regularly taken money from customer\'s accounts for his own use and changed the bank records to cover his actions. Ben is guilty of
A. a conspiracy
B. a Ponzi scheme
29) The Sarbanes-Oxley Act (2002) imposed stricter regulations on how corporations do business through regulations in each of the following areas EXCEPT
A. tax compliance
B. financial reporting
C. corporate governance
30) Joan is the CFO of Para Corp. and is a year from retirement. In order to guarantee herself a very substantial bonus and to boost her retirement package, she knowingly certifies false financial reports making the company appear to be much more profitable than it really is. She further takes steps to assure that the financial report was not reviewed through internal controls maintained by Para Corp. Under the provisions of the Sarbanes-Oxley Act (2002), if her fraud is NOT part of a larger scheme, what criminal penalties are possible for Joan?
A. $1 million in fines and up to 10 years in prison
B. $2 million in fines and up to 12 years in prison
C. $5 million in fines and up to 15 years in prison
D. $10 million in fines and up to 20 years in prison
BAM 313 Final Exam Answers (NEW).doc
BAM 313 Final Exam Answers (NEW).doc
1. The CEO of High Tech International decides to change an accounting method at the end of the current year. The change results in reported profits increasing by 5%, but the company’s cash flows are not changed. If capital markets are efficient, then:
a. The stock price will increase only if the accounting change will also result in higher profits in the next year.
b. The stock price will increase due to higher profits.
c. The stock price will decrease because accounting method changes are not permitted under generally accepted accounting principles.
d. The stock price will not be affected by the accounting change.
2. S-type corporations have all of the following advantages EXCEPT
a. The owners have limited liability.
b. All owners must be people, no corporations.
c. Distributions are taxed twice, similar to corporate dividend payments.
d. They are taxed as partnerships.
3. Assume that you went to Las Vegas and hit the jackpot for $5 million. Further assume that you were offered a choice to receive the $5 million today, or receive it in two years. According to one of the principles of finance, which would you take?
a. You would be indifferent as to when you would receive the $5 million.
b. $5 million in two years because you would be afraid of spending it all right away
c. $5 million today because it would be worth more than if you would receive it in two years
d. $5 million in two years because it would be worth more than if you would receive it today
4. In terms of the costs to organize each, which of the following sequences is correct, moving from highest to lowest cost?
a. corporation, limited partnership, general partnership, sole proprietorship
b. sole proprietorship, general partnership, corporation, limited partnership
c. general partnership, sole proprietorship, limited partnership, corporation
d. sole proprietorship, general partnership, limited partnership, corporation
5. Which form of organization is free of initial legal requirements?
a. general partnership
b. sole proprietorship
d. both a and b
6. Which of the statements below are true?
a. The sole proprietorship and the general partnership both feature unlimited liability.
b. The corporation and the limited partnership both provide at least some owners with limited liability.
c. A corporation is the business form that is typically the most complicated (legally) to establish.
d. all of the above
7. Capital budgeting is concerned with:
a. planning sales of a corporation’s equity capital
b. what long-term investments a firm should undertake
c. whether a company’s assets should be financed with debt or equity
d. managing a firms cash budgeting procedures
8. Which of the following is an advantage of organized stock exchanges?
a. increased stock price volatility
b. only profitable companies may issue new securities on an organized exchange
c. screening companies to ensure only low risk stocks are sold
d. providing a continuous market
9. What is the term for a graphical representation of the relationship between interest rates and the maturities of debt securities?
a. yield curve
b. maturity chart
c. term curve
d. inflationary expectations
10. The one-year interest rate is 4%. The interest rate for a two-year security is 6%. The one-year interest rate one year from now is 8.34%. According to the liquidity preference theory, the risk premium for the second one-year investment is:
11. An example of a primary market transaction involving a money market security is:
a. a new issue of a security with a very long maturity
b. the transfer of a previously-issued security with a very long maturity
c. a new issue of a security with a very short maturity
d. the transfer of a previously-issued security with a very short maturity
12. You are considering an investment in a U.S. Treasury bond but you are not sure what rate of interest it should pay. Assume that the real risk-free rate of interest is 1.0%; inflation is expected to be 1.5%; the maturity risk premium is 2.5%; and, the default risk premium for AAA rated corporate bonds is 3.5%. What rate of interest should the U.S. Treasury bond pay? a. 8.5%
13. A life insurance company purchases $1 billion of corporate bonds from premiums collected on its life insurance policies. Therefore:
a. the corporate bonds are direct securities and the life insurance policies are direct securities
b. the corporate bonds are direct securities and the life insurance policies are indirect securities
c. the corporate bonds are indirect securities and the life insurance policies are direct securities
d. the corporate bonds are indirect securities and the life insurance policies are indirect securities
14. A commitment fee is:
a. paid by investors to guarantee that a company will borrow from them
b. paid by bondholders to secure the right to convert bonds into common stock
c. an amount paid by an investment banker to ensure the sale of securities
d. an amount paid on the unused portion of a loan in a private placement
15. You plan to go to Asia to visit friends in three years. The trip is expected to cost a total of $10,000 at that time. Your parents have deposited $5,000 for you in a Certificate of Deposit paying 6% interest annually, maturing three years from now. Uncle Lee has agreed to pay for all remaining expenses. If you are going to put Uncle Lee’s gift in an investment earning 10% over the next three years, how much must he deposit today, so you can visit your friends three years from today?
16. What is the present value of an annuity of $120 received at the end of each year for 11 years? Assume a discount rate of 7%. The first payment will be received one year from today (round to nearest $1).
17. You won the lottery and can receive either (1) $60,000 today, or (2) $10,000 one year from today plus $25,000 two years from today plus $35,000 three years from today. You plan to use the money to pay for your child’s college education in 15 years. You should:
a. take option two because you get $70,000 rather than $60,000 regardless of current interest rates.
b. take the $60,000 today because of the time value of money regardless of current interest rates
c. take the $60,000 today only if the current interest rate is at least 16.67%
d. take the $60,000 today if you can earn 6.81% per year or more on your investments
18. You deposit $5,000 per year at the end of each of the next 25 years into an account that pays 8% compounded annually. How much could you withdraw at the end of each of the 20 years following your last deposit if all withdrawals are the same dollar amount? (The twenty-fifth and last deposit is made at the beginning of the 20-year period. The first withdrawal is made at the end of the first year in the 20-year period.)
19. Your son is born today and you want to make him a millionaire by the time he is 50 years old. You deposit $10,700 in an investment account and want to know what annual interest rate must you earn in order to have the account value equal to $1,000,000 on your son’s 50th birthday.
20. You sell valuable artifacts from your household estate for $200,000 and want to use the money to supplement your retirement. You receive the money on your 60th birthday, the day you retire. You want to withdraw equal amounts at the end of each of the next 25 years. What constant amount can you withdraw each year and have nothing remaining at the end of 20 years if you are earning 7% interest per year?
Stock W has the following returns for various states of the economy:
State of the Economy
Stock W’s Return
21. Stock W’s standard deviation of returns is:
22. Which of the following types of risk is diversifiable?
a. betagenic, or ecocentric risk
b. unsystematic, or company-unique risk
c. systematic risk
d. market risk
23. You are considering buying some stock in Continental Grain. Which of the following are examples of non-diversifiable risks?
I. Risk resulting from a general decline in the stock market.
II. Risk resulting from a possible increase in income taxes.
III. Risk resulting from an explosion in a grain elevator owned by Continental. IV. Risk resulting from a pending lawsuit against Continental.
a. II, III, and IV
b. I and II
c. III and IV
d. I only
24. Decker Corp. common stock has a required return of 17.5% and a beta of 1.75. If the expected risk free return is 3%, what is the expected return for the market based on the CAPM?
25. The return on the market portfolio is currently 12%. Mobile Phone Corporation stockholders require a rate of return of 30% and the stock has a beta of 3.2. According to CAPM, determine the risk-free rate.
26. Which of the following is true?
a. Two points on the Characteristic Line are the T-bill and the market portfolio.
b. All securities have a beta between 0 and 1.
c. Most of the unsystematic risk is removed by the time a portfolio contains 30 stocks.
d. The greater the total risk of an asset, the greater the expected return.
27. Which of the following is NOT a definition of yield to maturity?
a. return that an investor will earn if they buy the bond for its market price and hold it until maturity
b. discount rate that equates present value of future cash flows with a bond’s price
c. investors’ required rate of return on a bond investment
d. discount rate that equates present value of future cash flows with a bond’s face value
28. Charlie Corporation has two bonds outstanding. Both bonds mature in 10 years, have a face value of $1,000, and have a yield to maturity of 8%. One bond is a zero coupon bond and the other bond has a coupon rate of 8%. Which of the following statements is true?
a. Both bonds must sell for the same price if markets are in equilibrium.
b. The zero coupon bond must have a higher price because of its greater capital gain potential.
c. All rational investors will prefer the 8% bond because it pays more interest.
d. The zero coupon bond must sell for a lower price than the bond with an 8% coupon rate.
29. GPR Corporation just issued $1,000 par 20-year bonds. The bonds sold for $936 and pay interest semiannually. Investors require a rate of 7.00% on the bonds. What is the amount of the semiannual interest payment on the bonds?
30. Two investors are considering the purchase of Corporation LMQ bonds. The bonds are selling at their par value of $1,000 with a coupon rate of 9%. Investor A decides to buy the bonds and Investor B does not buy the bonds. Why?
a. The yield to maturity for Investor A must be higher than the yield to maturity for Investor B.
b. Investor A must have a required return less than or equal to 9%.
c. Investor A must have a required return higher than the bond’s yield to maturity.
d. Investor B must have required return lower than the bond’s yield to maturity.
31. The yield to maturity on a bond:
a. is lower for higher risk bonds
b. is fixed in the indenture
c. is generally below the coupon interest rate
d. is the required rate of return on the bond
32. Crandle’s common stock is currently selling for $79.00. It just paid a dividend of $4.60 and dividends are expected to grow at a rate of 5% indefinitely. What is the required rate of return on Crandle’s stock?
33. If a shareholder cannot attend the corporation’s annual meeting, the shares may still be voted using:
a. the preemptive right
b. majority voting rules
c. the cumulative voting right
d. a proxy
34. Asymmetric Frames Corp had a return on equity of 15%. The corporation’s earnings per share was $6.00, its dividend payout ratio was 40% and its profit-retention rate was 60%. If these relationships continue, what will be United Financial Corp’s internal growth rate?
35. Bensen Co. paid a dividend of $5.25 on its common stock yesterday. The company’s dividends are expected to grow at a constant rate of 8.5% indefinitely. The required rate of return on this stock is 15.5%. You observe a market price of $78.50 for the stock. Should you purchase this stock?
a. No, the market price is above the intrinsic value of the stock.
b. Yes, but only if you can keep the stock for at least 5 years.
c. Yes, the market price is below the intrinsic value of the stock.
d. No, the growth rate in dividends is too far below the required return.
36. Preferred stock differs from common stock in that:
a. Common stock investors have a required return and preferred stock investors do not.
b. Preferred stock dividends are fixed.
c. Preferred stock investors have a higher required return than common stock investors.
d. Preferred stock usually has a maturity date.
Texas Transport has five possible investment projects for the coming year. Each project is indivisible. They are:
37. The firm’s weighted marginal cost of capital schedule is 12 percent for up to $6 million of investment; 16 percent for between $6 million and $18 million of investment; and above $18 million the weighted cost of capital is 18 percent. The optimal capital budget is a. $23 million
b. $28 million
c. $12 million
d. $18 million
38. A corporate bond has a face value of $1,000 and a coupon rate of 5%. The bond matures in 15 years and has a current market price of $925. If the corporation sells more bonds it will incur flotation costs of $25 per bond. If the corporate tax rate is 35%, what is the after-tax cost of debt capital?
39. Sentry Manufacturing paid a dividend yesterday of $5 per share (D0 = $4). The dividend is expected to grow at a constant rate of 8% per year. The price of Sentry Manufacturing’s stock today is $29 per share. If Sentry Manufacturing decides to issue new common stock, flotation costs will equal $2.50 per share. Sentry Manufacturing’s marginal tax rate is 35%. Based on the above information, the cost of retained earnings is
40. Given the following information on S & G Inc.’s capital structure, compute the company’s weighted average cost of capital.
Type of Percent of
Capital Capital Structure
Preferred Stock 5%
Common Stock 55% (Internal Only)
The company’s marginal tax rate is 40%.
41. Lithium, Inc. is considering two mutually exclusive projects, A and B. Project A costs
$95,000 and is expected to generate $65,000 in year one and $75,000 in year two. Project
B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. Lithium, Inc.’s required rate of return for these projects is 10%.The modified internal rate of return for Project A is
42. Lithium, Inc. is considering two mutually exclusive projects, A and B. Project A costs
$95,000 and is expected to generate $65,000 in year one and $75,000 in year two. Project
B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. Lithium, Inc.’s required rate of return for these projects is 10%. The equivalent annual annuity amount for project A is
43. A machine that costs $1,500,000 has a 3-year life. It will generate after tax annual cash flows of $700,000 at the end of each year. It will be salvaged for $200,000 at the end of year 3. If your required rate of return for the project is 13%, what is the NPV of this investment?
Interstate Appliance Inc. is considering the following 3 mutually exclusive projects. Projected cash flows for these ventures are as follows:
Yr 1=$ -0-
Yr 2= -0-
Yr 2= 3,000,000
Yr 2= -0-
Yr 3= -0-
Yr 3= 2,000,000
Yr 4= -0-
Yr 4= -0-
Yr 5= -0-
44. If Interstate Appliance has a 12% cost of capital, what decision should be made regarding the projects above?
a. accept plan A
b. accept plan B
c. accept plan C
d. accept Plans A, B and C
45. AFB Systems is considering a new marketing campaign that will require the addition of a new computer programmer and new software. The programmer will occupy an office in AFB’s current building and will be paid $8,000 per month. The software license costs $1,000 per month. The rent for the building is $4,000 per month. AFB’s computer system is always on, so running the new software will not change the current monthly electric bill of $900. The incremental expenses for the new marketing campaign are:
a. $8,000 per month
b. $9,000 per month
c. $13,000 per month
d. $13,900 per month
46. Tillamook Farms invests in a new kind of frozen dessert called polar cream that becomes very popular. So many new customers come to the store that the sales of existing ice cream products are increased. The extra sales revenue:
a. should be included in the analysis, but not the cost of the ice cream that is sold as that is a recurring expense
b. should not be counted as incremental revenue for the polar cream project because the sales come from existing products
c. are cannibalized sales that should be excluded from the analysis
d. are synergistic effects that should be counted as incremental revenues for the polar cream project
47. AFB, Inc. requires an investment in equipment of $600,000 to replace existing equipment. The existing equipment will produce after-tax salvage value of $70,000. Net working capital requirements are increased by $50,000. What is the total cash outflow at time zero?
48. An asset with an original cost of $100,000 and a current book value of $20,000 is sold for $50,000 as part of a capital budgeting project. The company has a tax rate of 30%. This transaction will have what impact on the project’s initial outlay?
a. reduce it by $6,000
b. reduce it by $15,000
c. reduce it by $20,000
d. reduce it by $50,000
49. Which of the following would be considered a fixed cost in a manufacturing setting?
a. sales commissions
b. direct labor
c. direct materials
50. Operating leverage has to do with:
a. using preferred stock to increase sales volume
b. the incurrence of fixed operating costs in the firm’s income stream
c. borrowing money to finance a firm’s growth
d. financing with fixed cost sources of capital
51. Optimal capital structure is:
a. the mix of funds that will maximize the firm’s interest tax shield
b. the mix of permanent sources of funds used by the firm in a manner that will maximize the company’s common stock price
c. the mix of funds that will minimize the firm’s cost of equity capital
d. the mix of all items that appear on the right-hand side of the company’s balance sheet
52. Which of the following statements about operating leverage is true?
a. Operating leverage is the responsiveness of the firm’s EBIT to fluctuations in sales.
b. Operating leverage involves the usage of fixed cost financial securities in the operation of a business.
c. Operating leverage is the responsiveness of the firm’s EPS to fluctuations in sales.
d. Operating leverage reduces a firm’s risk.
53. The dividend irrelevance hypothesis is based on all of the following assumptions EXCEPT: a. perfect capital markets.
b. borrowing decisions will not be altered by the amount of dividend payments.
c. investment decisions will not be altered by the amount of dividend payments.
d. investors do not need cash dividends to supplement their current income.
54. Concentric Corporation has 10 million shares of stock outstanding. Concentric’s after-tax profits are $140 million and the corporation’s stock is selling at a price-earnings multiple of 18, for a stock price of $252 per share. Concentric’s management issues a 40% stock dividend. What is the effect on an investor who owns 100 shares of Concentric before the dividend if Concentric’s price-earnings multiple remains the same after the dividend is paid?
a. The investor will own 100 shares worth $35,280.
b. The investor will own 100 shares worth $25,200.
c. The investor will own 140 shares worth $25,200.
d. The investor will own 140 shares worth $35,280.
55. Which of the following is true if dividend policy is irrelevant?
a. Perfect capital markets exist.
b. The information effect exists.
c. Tax deferral on capital gains exists.
d. The clientele effect exists.
56. Use the “percent of sales method” of preparing pro forma financial statements to determine the projection for next year’s cost of goods sold. Make the following assumptions: current year’s sales are $27,800,000; current year’s cost of goods sold is $17,528,000; sales are expected to rise by 30%. What is the projection for next year’s cost of goods sold?
57. Predicting a firm’s future financial needs includes all of the following steps EXCEPT:
a. estimation of projected sales and expenses
b. estimation of investment levels for current and fixed assets
c. review of the firm’s sales revenues and expenses over all past planning periods
d. determination of the firm’s financing needs for the period
58. Which of the following is always a non-cash expense?
c. income taxes
d. none of the above
59. Which of the following loans provide the least amount of security to the lender? a. floating lien
c. terminal warehouse agreement
d. chattel mortgage
60. Which of the following statements concerning liquidity and debt is true?
a. A firm can reduce its risk for illiquidity by shifting from short-term debt to long-term debt.
b. The greater the use of short-term debt, the lower the risk of illiquidity.
c. Long-term debt is generally less costly than short-term debt.
d. The risk of illiquidity does not depend on the mix of short-term versus long-term debt.
61. Hyper Retail Outlets sell goods on terms of net 40. The store’s average monthly sales (all on credit) are $70,000. Hyper pledges all of its receivables to the bank, which advances 80% of the face value of the receivables at a rate of 2.5% above prime. The bank also charges a 1% processing fee on all receivables pledged. Hyper borrows the full amount possible, and the current prime rate is 5%. What is the annual percentage rate (APR) of using this source of financing for one full year?
62. The break-even model enables the manager of the firm to:
a. determine the optimal amount of debt financing to use.
b. calculate the minimum price of common stock for certain situations.
c. set appropriate equilibrium thresholds.
d. determine the quantity of output that must be sold to cover all operating costs.
63. QuadCity Manufacturing, Inc. reported the following items: Sales = $6,000,000; Variable
Costs of Production = $1,500,000; Variable Selling and Administrative
Expenses = $550,000; Fixed Costs = $1,350,000; EBIT = $2,600,000; and the Marginal Tax Rate =35%. QuadCity’s break-even point in sales dollars is:
64. Based on the data contained in Table A, what is the break-even point in sales dollars?
Average selling price per unit $18.00
Variable cost per unit $13.00
Units sold 400,000
Fixed costs $650,000
Interest expense $50,000
65. Financing a portion of a firm’s assets with securities bearing a fixed rate of return in hopes of increasing the return to stockholders refers to:
a. combined leverage
b. business risk
c. financial leverage
d. operating leverage
66. Which of the following statements about combined (operating & financial) leverage is true?
a. High operating leverage and high financial leverage offset one another, meaning that if sales increase by 10%, then EPS will also increase by 10%.
b. If a firm employs both operating and financial leverage, any percent change in sales will produce a larger percent change in earnings per share.
c. A firm that is in a capital-intensive industry should use a higher level of financial leverage than a firm that employs low levels of operating leverage.
d. Usage of both operating and financial leverage reduces a firm’s risk.
67. Assuming no corporate taxes, the independence hypothesis suggests that a firm’s weighted average cost of capital will:
a. remain constant because the cost of equity will be increasing as the amount of debt increases due to the increased risk.
b. increase proportionally with the increase in the amount of debt a firm uses.
c. remain constant regardless of capital structure because the cost of debt and the cost of equity are the same.
d. decrease proportionally with the increase in the amount of debt a firm uses.
68. Mix Sweet Shop bakes and sells pies. Mix has annual fixed costs of $880,000 and a variable cost per pie of $7.50. Each pie sells for $15.50 each. The firm expects to sell 500,000 pies annually. What is the break-even point in sales dollars?
69. Which of the following transactions will lower a company’s financial leverage?
a. A mortgage loan is obtained and the proceeds are used to pay off existing short-term debt.
b. Common stock is sold and the proceeds are used to pay off existing short-term debt.
c. Preferred stock is sold and the proceeds are used to pay off existing short-term debt.
d. Short-term debt is obtained to get the company through a period of negative net income and cash flow.
70. Dividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories?
a. the residual dividend theory
b. the information effect
c. the expectations theory
d. the clientele effect
71. An increase in flotation costs will most likely result in which of the following?
a. smaller dividend payments so that less external equity financing is needed
b. larger dividend payments so shareholders are able to earn their required returns
c. no change in dividend policies because flotation costs are paid by purchasers of common stock
d. larger dividend payments to offset higher taxes paid by investors
72. Assume that the tax on dividends and the tax on capital gains is the same. All else equal, what would a prudent investor prefer?
a. The prudent investor would prefer capital gains—the capital gain tax liability can be deferred until gains are realized.
b. The prudent investor would be indifferent between receiving dividends or capital gains.
c. The prudent investor would prefer dividends—a dollar today is always worth more than a dollar to be received in the future. d. More information is needed.
73. While Rogue Corporation has been in business for over 50 years, newly developed products pushed the firm’s year-over-year growth rate to 35% during the latest three years. The firm is proud of its history of paying dividends, but the vigorous recent growth of the firm has left it cash challenged. Which of the following policies/procedures would you consider best under the circumstances?
a. Substitute a stock dividend for the current cash dividend.
b. Look seriously for a merger partner.
c. Enter into a long-term stock repurchase program.
d. Borrow long-term to pay the current dividend.
74. The president of Smith Brothers, Inc. wants a dividend policy that minimizes the likelihood of decreasing the company’s dividend per share. Which of the following policies should the CEO select?
a. regular dividend plus a year-end extra
b. constant dividend payout ratio
c. stable dollar dividend per share
d. All policies have the same likelihood of a dividend decrease because dividend changes are dependent on changes in earnings.
75. Plantain, Inc. declared a dividend of $1 per share on March 1. The ex-dividend date is March 15th, and the payment date is april 1st. The most likely record date is:
a. February 27th
b. March 13th
c. March 29th
d. March 17th
76. How frequently do corporations generally pay dividends?
77. All of the following are potential benefits of stock repurchases EXCEPT:
a. a favorable impact on earnings per share
b. the elimination of a minority ownership group of stockholders
c. an approach for maintaining the existing capital structure while still making a distribution to shareholders
d. a means for providing an internal investment opportunity
78. Which of the following strategies may be used to alter a firm’s capital structure toward a higher percentage of debt compared to equity?
a. maintain a low dividend payout ratio
b. stock split
c. stock repurchase
d. stock dividend
79. Sinkmaster Corp. settled a large lawsuit that caused earnings to be negative for the quarter. This quarterly loss was the first in 22 years. In addition, the company has a record of 48 consecutive quarters of dividend payments. Which of the following is correct?
a. The company can omit the dividend; shareholders are always understanding about the riskiness of business.
b. The company can use cash generated through prior retention of earnings, or borrowed funds to pay the dividend.
c. The clientele effect says that investor choice of investment vehicle is independent of dividend policy and therefore the payment/omission of the dividend is immaterial.
d. The company cannot pay dividends this quarter since the company had no earnings.
80. Which of the following is a spontaneous source of financing?
a. notes payable
b. common stock
c. accrued expenses
81. The percent of sales method does not accurately estimate the balances for lumpy assets. Which of the following statements best describes the possible errors?
a. If excess capacity exists, the percent of sales method will overestimate asset requirements.
b. The percent of sales method consistently overestimates the forecasted balances of lumpy assets.
c. The percent of sales method consistently underestimates the forecasted balances of lumpy assets.
d. If fixed assets are utilized at full capacity currently, the percent of sales method will underestimate the forecasted fixed asset balance.
82. The accuracy of the percent of sales forecast method is impaired if:
a. scale economies are present for assets.
b. asset needs are independent of sales level.
c. assets must be purchased in discrete quantities.
d. All of the above impair the accuracy of the percent of sales forecast method.
83. Which of the following statements is MOST correct concerning the relationship between a company’s cash budget and its income statement?
a. If net income is positive, then cash flow could be positive or negative, but if net income is negative, cash flow must also be negative.
b. If net income is positive, then cash flow must be positive.
c. Cash flow could be positive whether net income is positive or negative.
d. If net income is positive for 3 or more months in a row, then cash flow must be positive.
CraftCo, Inc.’ projected sales for the first six months of 2012 are given below:
Jan. $500,000 April $490,000
Feb. $740,000 May $740,000
Mar. $380,000 June $610,000
40% of sales are collected in cash at time of sale, 50% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Cost of goods sold is 60% of sales. Purchases are made in the month prior to the sales, and payments for purchases are made in the month of the sale. Total other cash expenses are $40,000/month. The company’s cash balance as of February 28, 2012 will be $25,000. Excess cash will be used to retire short-term borrowing (if any). CraftCo, Inc. has no short term borrowing as of February 28, 2012. Assume that the interest rate on short-term borrowing is 1% per month. The company must have a minimum cash balance of $15,000 at the beginning of each month.
84. What is CraftCo, Inc.’s total cash receipts for April 2010?
85. A company collects 25% of its sales during the month of sale, 65% one month after the sale, and 10% two months after the sale. The company expects sales of $50,000 in August, $80,000 in September, $90,000 in October, and $60,000 in November. How much money is expected to be collected in October?
LPD Logistics, Inc.’s projected sales for the first six months of 2010 are given below.
Jan. $300,000 April $350,000
Feb. $350,000 May $500,000
Mar. $475,000 June $400,000
20% of sales are collected in the month of the sale, 75% are collected in the month following the sale, and 5% are written off as uncollectible. Cost of goods sold is 80% of sales. Purchases are made the month prior to the sales and are paid during the month the purchases are made (i.e. goods sold in March are bought and paid for in February). Total other cash expenses are $35,000/month. The company’s cash balance as of February 1, 2010 will be $30,000. Excess cash will be used to retire short-term borrowing (if any). LPD has no short term borrowing as of February 28, 2010. Assume that the interest rate on short term borrowing is 1% per month. The company must have a minimum cash balance of $20,000 at the beginning of each month.
86. What is LPD’s projected total disbursements for April?
87. The cash budget consists of all the following factors EXCEPT:
a. cash disbursements
b. cash receipts
c. new financing needed
d. net income
88. What is the primary tool for short-term financial forecasting?
a. pro forma balance sheet
b. pro forma cash budget
c. capital budgeting
d. pro forma income statement
89. A firm’s cash position would most likely be hurt by:
a. decreasing excess inventory
b. retiring outstanding debt
c. establishing stricter (shorter) credit terms
d. increasing the net profit margin
90. A company that increases its liquidity by holding more cash and marketable securities is:
a. likely to achieve a higher return on equity because of higher interest income
b. going to maximize firm value because risk is decreased
c. likely to achieve a lower return on equity because of the smaller rates of return earned on cash and marketable securities compared to the firm’s other investments
d. going to have to sell common stock to raise the cash to become more liquid
91. Which of the following actions would improve a firm’s liquidity?
a. buying machinery with long-term debt
b. purchasing inventories for cash
c. purchasing inventory with long-term debt
d. purchasing inventory on trade credit
92. According to the hedging principle, fixed assets should NOT be financed with:
a. permanent plus spontaneous financing
b. equity financing
c. permanent financing
d. temporary financing
93. Accrued wages and accrued taxes are considered to be:
a. spontaneous sources of unsecured short-term financing
b. current assets
c. permanent sources of financing because companies must always pay wages and taxes
d. secured sources of short-term financing
94. Spontaneous sources of financing include:
a. marketable securities
b. accounts receivable
c. common stock
d. wages payable
95. Permanent sources of financing include all but:
a. corporate bonds
b. commercial paper
c. preferred stock
d. common stock
96. All of the following are likely to increase the cost of a company’s short-term financing EXCEPT:
a. an increase in the company’s debt rating by Moody’s or Standard and Poors
b. taking a loan on a discount basis
c. an increase in the compensating balance required
d. an increase in the bank’s prime lending rate
97. Brown Inc. needs to borrow $250,000 for the next 6 months. The company has a line of credit with a bank that allows the company to borrow funds with an 8% interest rate subject to a 20% of loan compensating balance. Currently, Brown Inc. has no funds on deposit with the bank and will need the loan to cover the compensating balance as well as their other financing needs. How much will Brown Inc. need to borrow?
98. All of the following are potential advantages of commercial paper EXCEPT:
a. flexible repayment terms.
b. ability to borrow very large amounts.
c. lower interest rates than comparable sources of short-term financing.
d. no compensating balance requirements.
99. An inventory loan agreement in which the inventories pledged as collateral are physically separated from the firm’s other inventory and placed under the control of a third-party is called a:
a. floating lien agreement
b. field warehouse agreement
c. securitized inventory loan arrangement
d. chattel mortgage agreement
100.Crawley, Inc. has a line of credit with HNC Bank that allows the company to borrow up to $800,000 at an interest rate of 12 percent. However, Crawley, Inc. must keep a compensating balance of 18 percent of any amount borrowed on deposit at the bank. Crawley, Inc. does not normally keep a cash balance account with HNC Bank. What is the effective annual cost of credit?
Financial management deals with the maintenance and creation of economic value or wealth.Answer: TRUE2) Each financial decision made by a corporate manager can be evaluated by its direct impact on the corporation\'s stock price.Answer: FALSE3) The fundamental goal of a business is to maximize the retained earnings available to the corporation\'s shareholders.Answer: FALSE4) Shareholder wealth maximization means maximizing the price of the existing common stock.Answer: TRUE5) It is important to evaluate a corporate manager\'s financial decision by measuring the effect the decision should have on the corporation\'s stock price if everything else were held constant.Answer: TRUE6) Corporate managers should accept investment projects that maximize profits in the short run because of the time value of money.Answer: FALSE7) The goal of the firm\'s financial managers should be the maximization of the total value of the firm\'s stock.Answer: TRUE8) The payment of a dividend to current shareholders will have no impact on a corporation\'s share price because the cash paid is not available to future potential shareholders who may want to buy the corporation\'s stock.Answer: FALSE9) One problem with maximization of shareholder wealth as a goal is that it ignores risk taken by the firm\'s financial decisions.Answer: FALSE10) The goal of profit maximization ignores the risk of financial decisionsAnswer: TRUE11) Only a firm\'s financial decisions affect its stock prices.Answer: FALSE12) Shareholders react to poor investment or dividend decisions by causing the total value of the firm\'s stock to fall, and they react to good decisions by bidding the price of the stock up.Answer: TRUE13) The primary goal of a publicly owned corporation is to ________.A) maximize dividends per shareB) maximize shareholder wealthC) maximize earnings per share after taxesD) minimize shareholder riskAnswer: B14) Maximization of shareholder wealthA) represents a zero sum game in which one corporation gains at the expense of others.B) provides benefits to society as scarce resources are directed to their most productive use.C) is not a practical goal since it cannot be measured effectively.D) is achieved only if cash flows exceed accounting profits.Answer: A15) A financial manager is considering two projects, A and B. A is expected to add $2 million to profits this year while B is expected to add $2 million to profits this year while B is expected to add $1 million to profits this year. Which of the following statements is MOST correct?A) The manager should select project A because it maximizes profits.B) The manager should select the project that maximizes long-term profits, not just one year of profits.C) The manager should select project A or he is irrational.D) The manager should select the project that causes the stock price to increase the most, which could be A or B.Answer: D16) Shareholder wealth maximization meansA) maximizing earnings per share.B) maximizing dividends per share.C) maximizing the price of existing common stock.D) maximizing stockholders equity.Answer: C17) The goal of the firm should beA) maximization of profits (net income per share).B) maximization of shareholder wealth.C) maximization of market share.D) maximization of sales.Answer: B18) Which of the following goals of the firm are synonymous (equivalent) to the maximization of shareholder wealth?A) profit maximizationB) risk minimizationC) maximization of the total market value of the firm\'s common stockD) none of the aboveAnswer: C19) Which of the following is the most important goal that a corporation should strive for?A) maximize current profitsB) maximize market shareC) maximize revenueD) maximize shareholder wealthAnswer: D20) One of the causes of the recent financial crisis in the United States has been excessive risk taking due to underestimation of risk. How does this relate to financial leverage? Can overestimation of risk also be detrimental?Answer: Underestimation of risk can lead managers to borrow excessively to fund more and more projects. High levels of debt require interest and principal payments which may become impossible to make if the company\'s cash flows are reduced, even for short periods of time. Overestimation of risk can also be problematic. Managers who take on too little risk may be passing up desirable projects that could increase shareholder wealth. The principle that risk requires a return does not mean that all risk is bad, but rather that additional risk is ok if additional expected returns are high enough. If all risk was bad, companies would go out of business and all investors would buy U.S. Treasury Bills.21) Documents uncovered after the Exxon Valdez oil spill in Alaska revealed that Exxon could have used double-hulled oil tankers that would have prevented the spill, but the cost of refitting their fleet of single-hulled tankers was considered too high. Exxon determined that the cost of cleaning up an oil spill would be less than the cost of refitting the ships, thus increasing shareholder value. Several years after the oil spill, however, Exxon was fined billions of dollars for the spill. How do the costs of the clean up and the fines pertain to a discussion of maximizing shareholder value and ethical responsibility?Answer: Managers are supposed to maximize shareholder value. Exxon\'s analysis of the costs of an oil spill versus the cost of improving their tankers seems to have been a reasonable one at the time it was undertaken. The social costs of killing birds and fish were expected to be low. The outrage at Exxon\'s conduct and the subsequent large fines will change the estimation of future costs for similar situations. Managers need to consider the impact of their decisions on their companies\' cash flows. Socially undesirable activities may lead to boycotts, protests, lower sales, fines, etc. These costs must be included in their analyses. Society sets limits within which corporations must operate or the corporations, and their shareholders, will suffer. Therefore, acting in ethical and socially responsible ways is congruent with the goal of shareholder wealth maximization.1) When making financial decisions, managers should always look at marginal, or incremental cash flows.Answer: TRUE2) An investment project is acceptable if the total cash received over the life of the project exceeds the total cash spent over the life of the project.Answer: FALSE3) If two companies have the same net income and the same level of risk, they must also have the same stock price or the market is not in equilibrium.Answer: FALSE4) Profits represent money that can be spent, and as such, form the basis for determining the value of financial decisions.Answer: FALSE5) The root cause of agency problems is conflicts of interest.Answer: TRUE6) Investors will be indifferent between two investments if both investments have the same expected return.Answer: FALSE7) If the stock market is efficient, then investors do not need to read the Wall Street Journal or research companies before they select which stocks to buy because market prices already reflect all publicly available information.Answer: FALSE8) Giving the company\'s CEO stock options as part of his or her compensation package is an example of an agency cost.Answer: TRUE9) Cash flows and profits are synonymous; in other words, higher cash flows equal higher profits.Answer: FALSE10) Shareholder selection committees select potential board of director nominees ensuring that board members will monitor management sufficiently to protect shareholder interests.Answer: FALSE11) Managers should not be concerned with business ethics because ethical behavior is inconsistent with the primary goal of maximizing shareholder value.Answer: FALSE12) One of the problems associated with maximization of total current stock value is that it ignores the timing of a project\'s return.Answer: FALSE13) The risk-return tradeoff is seen in many areas of finance.Answer: TRUE14) The risk/return tradeoff implies that the return on a riskless asset must be zero.Answer: FALSE15) The sole proprietorship has no legal business structure separate from its owner.Answer: TRUE16) An efficient market is one where the prices of the assets traded in that market fully reflect all available information at any instant in time.Answer: TRUE17) The opportunity cost of any choice you make is the highest-valued alternative that you had to give up when you made the choice.Answer: FALSE18) Beginning in 2007 the United States experienced its most severe financial crisis since theGreat Depression of the 1930s.Answer: TRUE19) As of year-end 2012, the great economic recession in the United States that began in 2007 has NOT officially ended.Answer: FALSE20) While many factors contributed to the financial crisis of 2007 and beyond, it is safe to say that real estate loans were NOT much of a contributing factor.Answer: FALSE21) The purchase of a pool of mortgages is often financed through the sale of securities called mortgage-backed securities, or MBS. This is a key part of the securitization process.Answer: TRUE22) Underemployment is a term used to describe hiring employees who work for a designated foreman or team leader. In this sense they are employed under a specific individual.Answer: FALSE23) Fortunately, Europe was largely shielded from the economic recession that afflicted the world economy in 2007. The European economies contracted less and have recovered much more rapidly than their counterparts in the United States and China.Answer: FALSE24) A homeowner that owes more on his/her mortgage than the home is worth is said to be \"under water\".Answer: TRUE25) The five basic principles of finance include all of the following EXCEPTA) Cash flow is what matters.B) Money has a time value.C) Risk requires a reward.D) Incremental profits determine value.Answer: D26) Suppose XYZ Corporation is traded on the New York Stock Exchange. XYZ\'s closing price on Monday is $20 per share. After the market closes on Monday, XYZ makes a surprise announcement that it has obtained a major new customer. XYZ\'s stock will likelyA) open at $20 per share on Tuesday and then increase as more investors read the announcement in the Wall Street Journal.B) remain at $20 per share because in efficient markets the price already reflects all information.C) open above $20 because the positive news will result in a higher valuation even though the stock has not yet traded.D) open below $20 because the surprise announcement creates more uncertainty.Answer: C27) A corporate manager decides to build a new store on a lot owned by the corporation that could be sold to a local developer for $250,000. The lot was purchased for $50,000 twenty years ago. When determining the value of the new store projectA) the cost of the lot is zero since the corporation already owns it.B) the opportunity cost of the lot is $250,000 and should be included in calculating the value of the project.C) the cost of the lot for valuation purposes is $50,000 because land does not depreciate.D) the incremental cash flow should be the $50,000 original cost less accumulated amortization.Answer: B28) To measure value, the concept of time value of money is usedA) to determine the interest rate paid on corporate debt.B) to bring the future benefits and costs of a project, measured by its expected profits, back to the present.C) to bring the future benefits and costs of a project, measured by its cash flows, back to the present.D) to ensure that expected future profits exceed current profits today.Answer: C29) A financial manager is evaluating a project which is expected to generate profits of $100,000 per year for the next 10 years. The project should be accepted ifA) the cost of the project is less than $1,000,000.B) the cost of the project is less than the present value of $100,000 per year for 10 years.C) this project\'s expected profits are higher than any other projects the corporation has available.D) the present value of the project\'s cash inflows exceeds the present value of the project\'s cash outflows.Answer: D30) Investors want a return that satisfies the following expectations:A) A return for delaying consumptionB) An additional return for taking on riskC) An additional return for accepting dividends rather than capital gainsD) Both A and B.Answer: D31) The expected return on a riskless asset is greater than zero due toA) an expected return for delaying consumption.B) an expected return for opportunity costs.C) an expected return for taxes.D) irrational investors who believe risk is always present.Answer: A32) Joe, a risk-averse investor, is trying to choose between investment A and investment B. If investment A is riskier than investment B and Joe selects investment A anyway, thenA) the actual return for investment A will be higher than the actual return for investment B.B) the actual return for investment A will be higher than the expected return for investment B.C) the expected return for investment A will be higher than the actual return for investment B.D) the expected return for investment A will be higher than the expected return for investment B.Answer: D33) The principle of risk-return tradeoff means thatA) higher risk investments must earn higher returns.B) an investor who takes more risk will earn a higher return.C) a rational investor will only take on higher risk if he expects a higher return.D) an investor who bought stock in a small corporation five years ago has more money than an investor who bought U.S. Treasury bonds five years ago.Answer: C34) Project A is expected to generate positive cash flow of $1 million in 10 years while Project B is expected to generate $500,000 in 5 years. ThereforeA) Project A is preferred because shareholder value is based on cash flow.B) Project B is preferred because its cash flow is expected to be received sooner than the cash flow from Project A.C) Both projects have equal value because they average $100,000 per year.D) Project B may be preferred to Project A if the opportunity cost of money is high enough.Answer: D35) Company A reports sales of $100,000 and net income of $15,000. Company B reports sales of $100,000 and net income of $10,000. ThereforeA) Company A\'s cash flow may be higher or lower than Company B\'s cash flow even though A\'s net income is higher.B) Company A\'s cash flow is $5,000 more than Company B\'s cash flow.C) Company B is creating less value for its shareholders than Company A.D) Company B\'s accounts receivable must be higher than Company A\'s accounts receivable.Answer: A36) Profits are down so the controller decides to change the corporation\'s accounting policy relating to inventory costing. The change will allow the corporation to report higher income and higher assets, although the physical inventory has not changed. Which of the following statements is MOST correct?A) The stock price is likely to increase because income is higher.B) The stock price is likely to be unaffected because the stock market is efficient.C) The stock price is likely to decrease because reported inventory is higher.D) If the stock price increases, the stock market is efficient.Answer: B37) All of the following statements about agency problems are true EXCEPTA) Agency problems interfere with the goal of maximizing shareholder value.B) Agency costs are paid by the managers who do not act in the shareholders\' best interest.C) Agency problems result from the separation of management and the ownership of a firm.D) The root cause of agency problems is conflicts of interest.Answer: B38) All of the following contributed to recent financial crises EXCEPTA) Focusing on earnings instead of cash flow.B) Focusing on the short run.C) Relying on the efficiency of financial markets.D) Excessive risk taking due to underestimation of risk.Answer: C39) A corporate financial manager trying to maximize shareholder valueA) is not concerned with ethics but rather with writing iron-clad contracts.B) can safely ignore ethics as long as no laws are broken.C) must behave ethically in order to stay out of jail.D) is concerned with ethics because unethical behavior destroys trust, and businesses cannot function without a certain degree of trust.Answer: D40) John invested $1,000 in a risky investment and Bill invested $1,000 in a less risky investment. One year later, Bill\'s investment is worth $1,030. Which of the following statements is MOST correct?A) If John\'s investment is worth less than $1,030, then John was irrational to invest in the risky project.B) John\'s investment must be worth more than $1,030 because of the risk-return tradeoff, given that John\'s investment was more risky.C) If John\'s investment is worth more than $1,030, then Bill was irrational to invest in the less risky investment.D) The worth of John\'s investment cannot be determined with the information given.Answer: D41) In order to reduce agency problems, managers may be provided compensation that includesA) a fixed salary so managers\' pay is not at risk, allowing managers to focus on the company\'s business.B) a bonus based on the level of profit achieved during the year.C) an option to buy the company\'s stock.D) incentive pay for achieving higher sales than last year.Answer: C42) An investor is considering two equally risky investments. Investment A is expected to return $1,000 per year for the next 5 years. Investment B is expected to return $6,000 at the end of 5 years. Which of the following statements is MOST correct if both investments A and B have the same cost?A) A risk averse investor will select investment B because it is expected to provide the most cash ($6,000 > $5,000).B) A risk averse investor will select investment A because it provides cash earlier than investment B.C) The investor will select investment A only if the cost is less than $1,000.D) The investor may select investment A or investment B depending on the opportunity cost of money.Answer: D43) The CEO of High Tech International decides to change an accounting method at the end of the current year. The change results in reported profits increasing by 5%, but the company\'s cash flows are not changed. If capital markets are efficient, thenA) the stock price will not be affected by the accounting change.B) the stock price will increase due to higher profits.C) the stock price will increase only if the accounting change will also result in higher profits in the next year.D) the stock price will decrease because accounting method changes are not permitted under generally accepted accounting principles.Answer: A44) When evaluating an investment project, which of the following best describes the financial information needed by the decision maker?A) after-tax accounting profitsB) after-tax incremental cash flows to the company as a wholeC) incremental cash flows before taxes so the decision will not be biased by a tax code that may change in the futureD) pre-tax accounting profits adjusted for any accounting method changesAnswer: B45) The CEO of JLI Corp. decided to expand into a new market in 2010. At the end of 2010, JLI\'s stock price had decreased 5% since the beginning of the year. Which of the following statements is MOST correct?A) The CEO made a poor decision to expand because the stock price decreased during the year.B) The CEO made a poor decision to expand because the company\'s profits for the year obviously decreased, causing the drop in stock price.C) The CEO\'s decision may have been optimal, keeping the stock price from falling more than 5% for the year.D) CEO decisions are irrelevant because the efficient market determines the value of a company\'s stock.Answer: C46) High Tech Corp. cut its research and development budget in 2010 by $4,000,000 in order to improve its cash flow for the year. Which of the following statements is MOST correct?A) The stock price will likely increase because the value of stock is based on reported cash flow.B) The stock price may decrease because investors may predict that future cash flows will decrease due to the lack of innovation and new products.C) The change will have no impact on stock price because the company\'s profits will not change in 2010.D) The stock price will increase only if reported profits in 2010 are also higher than profits reported in 2009.Answer: B47) In which of the following cases will the agency problem between shareholders and managers be the greatest?A) 100% of the common stock is owned by the founder of the company who decided to retire and hired a manager to run his business for him.B) The Johnson family owns 50% of the common stock of the company. The other 50% is owned by 5 mutual funds.C) The common stock of the company is owned by many diverse shareholders, with no shareholder owning more than 1% of the outstanding stock.D) All top managers in the company own significant amounts of stock and stock options.Answer: C48) Executive compensation in the United StatesA) is dominated by performance-based compensation that ensures fair and just pay for corporate executives.B) is dominated by performance-based compensation designed to reduce agency problems.C) cannot be linked to stock prices as this would create a conflict of interest with existing shareholders.D) is well below levels in Europe and Asia.Answer: B49) The recent financial crises was exacerbated byA) managers who overestimated risk and hence did not invest sufficient funds.B) managers who underestimated the real risks of their decisions and borrowed excessively.C) a lack of financial leverage that made U.S. firms less competitive in world markets.D) extremely high interest rates in the United States that stifled investment.Answer: B50) Ethical behaviorA) is the fifth basic principles of finance.B) cannot be a concern to managers who are expected to maximize shareholder value.C) in the corporate world means not breaking any laws.D) is essential in business because unethical behavior destroys trust and business relationships.Answer: D51) Investors generally don\'t like risk. Therefore, a typical investorA) will not be induced to take on any risk.B) will only take on the least risk possible.C) will only take on additional risk if he expects to be compensated in the form of additional return.D) will only accept a zero return if the risk is zero.Answer: C52) In finance, we assume that investors are generallyA) neutral to risk.B) averse to risk.C) fond of risk.D) none of the aboveAnswer: B53) Consider the after-tax cash flows for Project S and Project L:Project S Project LYear 1 $3000 0Year 2 0 $3000Project S Project LYear 1 $3000 0Year 2 0 $3000A rational person would prefer ________.A) Project S because the money can be reinvested soonerB) Project L because they can avoid taxes by receiving cash flows laterC) information about profits instead of cash flowsD) neither investment over the otherAnswer: A54) Assume that an investor is offered a choice of a risk-free government bond or a high-risk corporate stock. Further assume that the expected return is the same for both. According to one of the axioms of finance, which investment would be chosen?A) the corporate stockB) the government bondC) neither, the investor would be indifferentD) none of the aboveAnswer: B55) Assume that an investor is offered a choice of a risk-free government bond that is expected to return 3.5% or a high-risk corporate stock. According to one of the principles of finance, what would induce the investor to purchase the corporate stock?A) a return that is substantially lower than 3.5%B) cash dividendsC) a return that is substantially higher than 3.5%D) none of the aboveAnswer: C56) Assume that you went to Las Vegas and hit the jackpot for $5 million. Further assume that you were offered a choice to receive the $5 million today, or receive it in two years. According to one of the principles of finance, which would you take?A) the $5 million in two years because you would be afraid of spending it all right awayB) the $5 million in two years because it would be worth more than if you would receive it todayC) You would be indifferent as to when you would receive the $5 million.D) the $5 million today because it would be worth more than if you would receive it in two yearsAnswer: D57) Assume that you won the Lotta Dough Lotto jackpot for $20 million. Further assume that you were offered a choice to receive the $20 million today, or receive it in equal installments of $1 million per year for 20 years. According to one of the principles of finance, which would you take?A) the $20 million in equal installments of $1 million per year for 20 years because you would be afraid of spending it all right awayB) the $20 million today because it would be worth more than if you would receive it in equal installments of $1 million per year for 20 yearsC) You would be indifferent as to when you would receive the $20 million since the total number of dollars received is the same either way.D) the $20 million in equal installments of $1 million per year for 20 years because it would be worth more than if you would receive it todayAnswer: B58) Which of the following statements best represents the \"Agency Problem\"?A) Managers might attempt to benefit themselves in terms of salary and perquisites at the expense of shareholders.B) The agency problem results from the separation of management and the ownership of the firm.C) The agency problem may interfere with the implementation of maximizing shareholder wealth.D) all of the aboveAnswer: D59) As of today, the most severe economic crisis to afflict the United States economy is considered to beA) the Great Depression of the 1930s.B) the Great Recession of 2007 - 2009.C) the Reagan Tax Law Changes of 1985.D) the Savings and Loan Crisis of 1978 - 1982.Answer: A60) The \"perfect storm\" of factors that contributed to the economic crisis of 2007 includeA) increases in the minimum wage rate, unchecked illegal immigration, and state government deficits.B) financial deregulation, unchecked commodity prices, floating currency exchange rates.C) poorly chosen mortgage loans, falling housing prices, and a contracting economy.D) agency costs, inefficient markets, and perfect capital markets.Answer: C61) Which of the following is NOT true regarding mortgaged-backed securities(MSB)?A) MSB are sold to investors who can hold them as an investment or resell them to other investors.B) The MSB process allows the mortgage bank or other financial institution that made the original mortgage loan to get its money back out of the loan and lend it to someone else.C) Securitization provides liquidity to the mortgage market and makes it possible for banks to loan more money to home buyers.D) All of the above statements are true.A
ECO 372 Final Exam (New) (Verified answers, Scored A)
ECO 372 Final Exam (New)
1. News Story: Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is weak and GM cars aren\'t selling well.
GM isn\'t sure when the plant will reopen. What type of unemployment describes the workers\' situation?
§ Frictional unemployment
§ Structural unemployment
§ Full unemployment
§ Cyclical unemployment
2. Globalization that allows governments to pursue expansionary policies can be dangerous because it can lead to:
§ A reduction in the debt ceiling
§ Goods price inflation
§ Asset price inflation
§ Goods price deflation
3. Macroeconomics is:
§ The study of aggregate economic relationships.
§ An analysis of economic reality that proceeds from the parts to the whole.
§ The study of pricing policies of firms and the purchasing decisions of households.
§ The study of individual choice and how that choice is influenced by economic forces.
4. Which of the following types of unemployment is considered to be the most controllable through demand-side macroeconomic policy?
§ Frictional unemployment
§ Cyclical unemployment
§ Structural unemployment
§ Natural unemployment
5. If banks hold excess reserves whereas before they did not, the money multiplier:
§ Will become smaller
§ Will become larger
§ Might increase or might decrease
§ Will be unaffected
6. Using the expenditure approach, gross domestic product equals:
§ The sum of consumption, investment, government purchases, and net exports
§ Gross national product minus net exports
§ The sum of consumption, investment, and government purchases
§ Gross national product
7. How do investment in technology and investment in capital differ?
§ They have similar effects on output so they have no important differences from an economic point of view.
§ They have the same effects on output but investments in technology are much more closely tied to the level of saving than investments in capital.
§ They have different effects on output because of the positive externalities associated with investments in capital.
§ They have different effects on output because of the positive externalities associate with investments in technology.
8. The interest rate is the price paid for use of a:
§ Real asset.
§ Financial liability.
§ Financial asset.
§ Real liability.
9. If the reserve requirement is 20 percent, and banks keep no excess reserves, an increase in an initial inflow of $100 into the banking system will cause
an increase in the money supply of:
10. Suppose farmers can use their land to grown either wheat or corn. The law of supply predicts that an increase in the market price of wheat will cause:
§ Farmers to substitute wheat for the production of corn.
§ Farmers to raise the production of corn and wheat.
§ Farmers to lower the production of corn and wheat.
§ Farmers to substitute corn for the production of wheat.
11. According to Keynes, why might deflation create problems for an economy?
§ In expectation of increased spending, too many entrepreneurs would begin businesses and most would fail.
§ The cost of repricing goods would increase costs, and therefore reduce profits, for businesses and they would cut production.
§ People would drop out of unions because unions would become ineffective at keeping wages of members high.
§ Consumers might expect prices to fall further and cut back consumption now.
12. When interest rates rise, people are:
§ More likely to borrow, that is, purchase a financial asset.
§ More likely to borrow, that is, sell a financial asset.
§ Less likely to borrow, that is, sell a financial asset.
§ Less likely to borrow, that is, purchase a financial asset.
13. According to the Classical growth model, an economy that increases its saving will grow:
§ Quickly since the increase in saving will permit greater investment.
§ Quickly since the increase in saving will permit more rapid technological progress.
§ Slowly because interest rates will fall, causing investment to decline.
§ Slowly because consumption and aggregate demand will be reduced.
14. Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies
is most appropriate according to the AS/AD model?
§ A reduction in government spending
§ An increase in taxes
§ An increase in government spending
§ No change in taxes or government spending
15. Which of the following topics is best characterized as a macroeconomic issue?
§ The effect of a drought on the price of corn
§ The decision by Apple to produce fewer Macintosh computers
§ The effect of an increase in federal spending on the unemployment rate
§ The choice a student makes in selecting college course
16. If income increases more rapidly than expected, then:
§ Estimates of the target rate of employment are likely to increase.
§ The budget is less likely to be in surplus.
§ Tax revenues will be lower than expected.
§ Spending on income-support programs will likely be lower than expected.
17. In which of the following situations is a budget surplus most likely to occur?
§ When fiscal policy is contractionary and the economy is expanding
§ When fiscal policy is expansionary and the economy is contracting
§ When fiscal policy is expansionary
§ When the economy is contracting
18. The largest expenditure component of GDP is:
§ Government spending
§ Net exports
19. Which of the following is the path through which contractionary monetary policy works?
§ Money down implies interest rate up implies investment up implies income down.
§ Money down implies interest rate down implies investment down implies income down.
§ Money down implies interest rate up implies investment down implies income down.
§ Money down implies interest rate down implies investment up implies income down.
20. As a country develops economically, what changes usually take place in the goods it exports?
§ There is little change because comparative advantage does not change.
§ Exports go from being diversified to being specialized in whatever the country finds to its comparative advantage.
§ Services and manufactured goods decline in importance and are replaced by raw materials and agricultural products.
§ Raw materials and agricultural products decline in importance and are replaced by services and manufactured goods.
21. What would make foreigners want to buy more from the United States?
§ Higher tariffs
§ Higher interest rates in the United States
§ Inflation in the United States
§ A fall in the value of the dollar in the foreign exchange market
22. The depreciation of currency will:
Balance a trade surplus.
§ Have no impact on a country\'s comparative advantage.
§ Worsen a country\'s comparative advantage.
§ Improve a country\'s comparative advantage.
23. The government of Crossland wants to influence its exchange rate. It will do so by buying and selling:
§ Currencies in its official reserves
§ Goods and services from the current account
24. If a country wants to prevent its exchange rates from falling, it could:
§ Place restrictions on imports
§ Pursue easier monetary policy
§ Remove any subsidies on exports
§ Remove restrictions on imports
25. Central banks are responsible for:
§ Both monetary policy and fiscal policy
§ Monetary policy but not fiscal policy
§ Neither monetary policy nor fiscal policy
§ Fiscal policy but not monetary policy
26. Quotas and tariffs can:
§ Never have the same effect on imports and import prices.
§ Have the same effect on the price of domestically produced goods if they are set appropriately.
§ Yield the same amount of tax revenue if they are set appropriately.
§ Both increase international trade by the same amount if set appropriately.
27. Between 2007 and 2009, the U.S. unemployment rate rose from under 5 percent to over 8 percent. A Keynesian economist would most likely
blame this increase in unemployment on:
§ An increase in the minimum wage.
§ An increase in the bargaining power of labor unions.
§ A decline in the level of aggregate demand.
§ A decline in aggregate supply.
28. U.S. imports involve an:
§ Inflow of foreign currency from foreigners to the U.S. economy
§ Inflow of dollars from foreigners to the United States economy
§ Outflow of foreign currency from the United States to foreigners
§ Outflow of dollars from the United States to foreigners
29. The law of demand states that quantity demanded of a good is inversely related to the price of that good. Therefore, as the price of a good goes:
§ Up, the quantity demanded goes down.
§ Down, the quantity demanded stays the same.
§ Up, the quantity demanded also goes up.
§ Down, the quantity demanded goes down.
30. According to Keynes, market economies:
§ Never experience significant declines in aggregate demand.
§ Are constantly experiencing significant declines in aggregate demand.
§ May recover slowly after they experience a significant decline in aggregate demand.
§ Quickly recover after they experience a significant decline in aggregate demand.
BUS 310 QUIZ 2
The Privacy Act of 1974 ensures that
federal employees can review their personnel files for accuracy.
workers who reveal company secrets to competitors face severe penalties.
employers cannot monitor personal emails received on work computers.
employees' behavior outside of work cannot be monitored or tested.
an employee's medical information cannot be shared without permission from the employee.
The ____ established the workweek in the United States as 40 hours per week.
Title VII of the 1964 Civil Rights Act makes illegal discrimination based on
knowledge, skills, and abilities.
The basic premise of OSHA is that each employer must provide a workplace that is safe for employees, which is known as the
general duty clause.
lawful worker treatment clause.
Quid pro quo sexual harassment typically involves
unwelcome individual advances for a date.
sexual favors in return for something of value.
making jokes about a particular gender.
inappropriate pictures with sexual content displayed on the wall.
meeting colleagues for dinner after work hours.
Which of the following would probably NOT be covered by the Americans with Disabilities Act?
A mentally retarded employee
An employee with a learning disability
An employee with cancer
A person with poor vision that is correctable with glasses
An employee who is thought to be disabled but is not
Titleist makes most of the golf clubs it sells to U.S. buyers in China, where the average hourly wage is the equivalent of less than $1 per hour. Under the provisions of the Fair Labor Standards Act, Titleist
is in violation of the act, because $1 per hour is less than the mandated minimum wage.
is in violation of the act, because some of the workers are younger than 16 years of age.
is in violation of the act, because the Chinese workers are nonexempt.
is NOT in violation of the act, because the FLSA applies only to workers in the United States.
is NOT in violation of the act, because the Chinese workers work fewer than 40 hours per week
The Age Discrimination in Employment Act prohibits discrimination with respect to age of employees or applicants near retirement age.
40 and over.
65 or over.
One method for establishing whether disparate impact exists in a company's hiring practices involves focus groups.
using the one-third rule.
using absolute counts of protected class members.
Alpha-Beta Company closed a plant and laid off 100 workers, who each made $100 per day in pay and benefits. The closing was announced by company managers on April 1 and took place 30 days later. Under the provisions of the Worker Adjustment and Retraining Act of 1988 (WARN), Alpha-Beta must pay a penalty of
The Vocational Rehabilitation Act of 1973 requires that that federal contractors receiving more than ____ must have affirmative action plans for persons who have disabilities.
Executive Order 11246 requires that federal contractors receiving more than ____ must have affirmative action plans.
Which labor law was passed to regulate union actions and internal affairs related to employee representation, shifting some power away from unions?
Fair Practices Act
Fair Labor Standards Act
The Privacy Act of 1974 applies directly to ____ employees.
The Americans with Disabilities Act requires companies to hire everyone with a documented disability.
discriminate against those persons who have a disability.
hire a diversity consultant.
make reasonable accommodations for disabled individuals.
spend $100,000 per year on disability training.
Local issues that must be dealt with by firms conducting business in foreign markets include all of the following EXCEPT
human resource technology.
Wangkyo is an electrical engineer who designs power systems for factories. His employer is sending him on a foreign assignment for one month, to design a system for a new factory that is being built overseas. Which skills will be MOST important to Wangkyo in his foreign assignment?
What is the term used when a company lets a foreign firm make and/or distribute its products in a local market?
When a company hires host-country nationals to staff foreign locations in underdeveloped countries, it must often
offer exercise classes.
provide extensive training and development.
hire a consultant.
seek permission from competitors.
cut the benefits package provided to employees.
Which of the following is NOT likely to be a part of a compensation package designed for an expatriate?
Job location assistance for the spouse
A cost-of-living allowance
A hardship premium
Unlimited travel to and from the home country
Disney chose Andre Lacroix to be CEO of Euro Disney, following his success as CEO of Burger King International. Disney chose an experienced international manager who lived in France, rather than send an American manager overseas, in part to eliminate the risk of expatriate failure. Expatriate failure occurs when the
expatriate needs extensive training before he or she is able to accept the assignment.
cost of sending the manager to the foreign assignment is greater than the benefit gained.
expatriate's coworkers report that he or she is not fitting in well.
business that is managed by the expatriate loses money.
expatriate returns early because of an inability to perform.
Which of the following is an accurate statement about labor unions outside the United States?
In foreign countries, few workers belong to labor unions.
Labor unions outside the United States are regulated by U.S. laws.
Foreign labor unions are more likely to be involved in political and social issues.
Outside the United States, labor contracts are formal legal contracts and employers can be sued in court by the unions for breaking them.
Foreign employers rarely negotiate with unions in their home country.
What is an advantage of direct investment in another country?
Less risk is involved.
It is not expensive.
There is more profit potential.
The facility is less integrated in the foreign market.
Synergy between business partners is achieved.
Under a geocentric staffing model,
host-country nationals are used heavily because they know the local markets.
the organization will have a skeleton human resource department at the host-country location, while the home-country human resource department retains all control.
the organization seeks to hire the best person available for a position regardless of where the individual comes from.
expatriate home-country nationals are hired to fill higher-level foreign positions.
the home-office perspective takes precedence over local issues.
Celebrity Cruises is based in Florida, but it hires workers from various countries to communicate with and serve guests from around the world. Which of the following is an accurate statement?
Celebrity will need to provide the same training to all of its foreign workers.
Celebrity will need to provide the same training to all of its workers.
Celebrity will need to tailor training to best develop workers from various countries.
Celebrity will not need to train its workers.
Celebrity will only need to train workers who have contact with customers; other workers need no training.
Locating a facility in a relatively underdeveloped area will impact all of the following human resource activities EXCEPT
Under which international strategy will several companies agree to cooperate for mutual benefit?
No outplacement firms exist in several Middle Eastern countries because the religion of Islam specifies that individuals should not benefit financially from other people's misfortunes. This cultural factor pertains to what type of difference?
Which international staffing model is typified by an organization using many host-country nationals to staff a variety of positions at many levels?
Which industrialized nation emerged as the only intact major power after World War II?
The United States