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Q:
Advertising that is targeted to particular customers, based on their observed online behavior, is called:
A. Targeted advertising.
B. Tracking advertising.
C. Behavioral advertising.
D. Online advertising.
Q:
An identifying marker placed on a users computer hard drive during visits in order to identify the user during each subsequent visit and to build profiles of their behavior over time is called a:
A. Spy.
B. Virus.
C. Cookie.
D. Firewall.
Q:
Online shoppers have always been concerned that:
A. They receive online ads for products similar to the ones they bought earlier on the Web.
B. Their favorite Web sites provide a large variety of products and services.
C. The government might become overly involved in protecting consumer privacy.
D. Information they reveal in the course of a sales transaction might be misused.
Q:
The major federal consumer protection agencies are authorized by law to:
A. Intervene directly into the very center of free market activities, if that is considered necessary to protect consumers.
B. Substitute government-mandated standards for decision making by private buyers and sellers.
C. Intervene in the market by influencing consumers to buy one product or service rather than another.
D. Both A and B, but not C
Q:
Which of the following is a mission of the Food and Drug Administration?
A. To assure the safety and effectiveness of a wide range of consumer products.
B. To prohibit unfair or deceptive advertising.
C. To ensure that packaging and labels contain all the necessary information.
D. Inspection of meat, poultry, seafood, and produce.
Q:
The main responsibility of the National Highway Traffic Safety Administration is to:
A. Set a uniform national speed limit.
B. Set airline safety standards.
C. Set motor vehicle safety standards.
D. Safeguard consumers from altered odometers.
Q:
Which agency(ies) was (were) created during the great wave of consumer regulations in the 1960s and early 1970s?
A. Consumer Product Safety Commission.
B. National Highway Traffic Safety Administration.
C. National Transportation Safety Board.
D. All of the above.
Q:
Which of the following departments was established in 1914 and has been given additional powers to protect consumers over the years, including in the area of online privacy?
A. Federal Trade Commission.
B. Food and Drug Administration.
C. Consumer Product Safety Commission.
D. Antitrust Division of the Department of Justice.
Q:
In your opinion, how is the relationship between modern corporations and their shareholders changing? Explain and justify your argument.
Q:
What is insider trading? Explain how the courts have defined this practice.
Q:
Why have U.S. institutions become more active as investors? How has this trend spread to other countries?
Q:
Do you think U.S. executives are compensated too highly? Why or why not?
Q:
Describe a current trend in corporate governance, providing a real example.
Q:
What are the key features of effective boards of directors?
Q:
Identify and provide an example for each of the five major legal rights afforded to stockholders.
Q:
Which of the following is not an instance of insider trading?
A. An auditor using nonpublic information about the company to invest in its stock.
B. A marketing executive briefing stock analysts on the companys sales performance.
C. The CEOs cousin buying stock after the CEO mentioned a pending offer to buy the company.
D. A stock broker passing an inside tip to a client, but not trading for his or her own account.
Q:
The Securities and Exchange Commission outlaws:
A. Any manipulative or deceptive device used to trade stocks.
B. Compensating company executives with stock options.
C. Trading in stocks by institutions.
D. Buying stock in a company for which you work.
Q:
In response to concerns about the lack of transparency in financial accounting, Congress passed a new law called the:
A. U.S. Corporate Sentencing Guidelines.
B. McCain-Feingold Act.
C. Sarbanes-Oxley Act.
D. Securities and Exchange Act.
Q:
Reports filed with the SEC provide information on a companys:
A. Sales and earnings.
B. Depreciation by line of business.
C. Details of foreign operations.
D. All of the above.
Q:
The mission of the Securities and Exchange Commission (SEC) is to:
A. Protect shareholders rights by making sure that stock markets are run fairly.
B. Protect companies from hostile takeovers.
C. Ensuring that institutional investors do not take control of company management.
D. Ensuring that the federal treasury receives its share of the revenues from stock trading.
Q:
Which of the following is not an example of fulfilling social objectives through stock ownership?
A. Selling stock of companies that did business in South Africa when it had a policy of racial discrimination.
B. Divesting from Chinese companies that made products using forced labor.
C. Selling stock of companies with a below-market rate of return.
D. Not investing in Burmese companies that had been accused of human rights abuses.
Q:
Social investors seek to eliminate from their investment portfolios companies that:
A. Pollute the environment.
B. Discriminate against employees.
C. Make dangerous products like tobacco or weapons.
D. All of the above.
Q:
The activism of institutional investors in other countries has been spearheaded by:
A. U.S.-based pension and mutual funds that in recent years acquired large stakes in foreign countries.
B. Foreign institutions that were granted new rights by their governments.
C. Managers who have become active in proxy battles in the Netherlands, Austria, and Hong Kong.
D. The rising number of individual investors in public service companies.
Q:
A reason for institutions becoming more assertive in promoting the interests of their member investors is:
A. It is difficult for institutions to sell their holdings.
B. Their members want them to.
C. Institutions have greater flexibility in selling stocks.
D. Institutions have nominated members on the finance committee of the board of directors.
Q:
Which of the following is not an argument for high executive compensation?
A. High salaries provide an incentive for innovation and risk-taking.
B. High salaries are necessary to attract and retain top talent.
C. Inflated executive pay helps U.S. firms compete with foreign rivals.
D. Well-paid managers are being compensated for outstanding performance.
Q:
Which of the following arguments opposes the idea of high executive pay?
A. High salaries provide an incentive for innovation and risk taking.
B. Not many individuals are capable of running todays large, complex organizations.
C. Top athletes and entertainers make a lot of money, so top executives should, too.
D. High salaries divert resources that could be used to invest in the business.
Q:
The main reason that American executives are paid so much is:
A. Pay is set by the compensation committees of the board, largely comprised of other CEOs who have an interest in pushing compensation up.
B. Qualified individuals are scarce, because most current CEOs were born during the baby bust years of the Great Depression.
C. High executive compensation in other nations puts upward pressure on the salaries of U.S. executives.
D. Most executives are paid based on their performance, and rising compensation reflects the excellent performance of their firms.
Q:
The agency problem arises when:
A. Owners manage the company on their own behalf.
B. There is no separation of ownership and control in a company.
C. Managers act in their own interest, rather than in the interest of shareholders.
D. Shareholders act in their own interest, rather than in the interest of the board.
Q:
By 2010, out of the 100 largest US companies, how many had separated the positions of CEO and board chairman?
A. Seven.
B. Fifteen.
C. Thirty-one.
D. Sixty.
Q:
Which of the following is a key feature of effective boards of directors?
A. Hold regular meetings without the CEO present.
B. Fill all important positions on the board with managers with insider knowledge of the firm.
C. Combine the duties of the board chairman and the chief executive.
D. Ensure that no outside members are included on the board.
Q:
How are directors (members of corporate boards) selected?
A. Shareholders elect the directors from a list of candidates.
B. The companys CEO appoints the directors.
C. The nominating committee elects the directors.
D. Shareholders with the greatest proportional ownership in the company become directors.
Q:
The audit committee is required by U.S. law to be:
A. Composed entirely of outside directors.
B. Financially literate.
C. Headed by the companys CEO.
D. A and B, but not C.
Q:
Which of the following is not a function of board committees?
A. The executive committee works closely with top managers on business matters.
B. The audit committee reviews the companys financial reports.
C. The compensation committee administers and approves salaries and benefits.
D. The finance committee works closely with the human resources department to fund employee salaries.
Q:
The board committee that administers and approves salaries and benefits of high-level managers in a company is called the:
A. Executive committee.
B. Human resources committee.
C. Nominating committee.
D. Compensation committee.
Q:
In 2010, median compensation for directors at the largest U.S. corporations was (rounded to the nearest $10):
A. $172,300.
B. $193,240.
C. $182,300.
D. $212,510.
Q:
Which of the following is true about corporate boards?
A. Corporate boards average 12 members.
B. About half of the directors are outside directors.
C. Only one-third of all companies have at least one woman on their board.
D. Ethnic minority board members make up about one out of three directors.
Q:
The paramount duty of the board of directors of a public corporation is to:
A. Ensure the company is profitable.
B. Select and oversee competent and ethical management to run the company.
C. Audit the firms financial statements for transparency.
D. Make certain that employees are dealt with in a fair and equitable manner.
Q:
The directors of a company are a central factor in corporate governance because they:
A. Exercise formal legal authority over company policy.
B. Have the highest stake in the performance of the company.
C. Have a moral responsibility to fulfill the needs of both the companys employees and customers.
D. Inherited the business from their predecessors.
Q:
Corporate governance involves the exercise of control over a companys:
A. Finance and accounting departments.
B. Entire operations.
C. Manufacturing facilities.
D. Marketing and human resources departments.
Q:
Which if the following is not a legal right of stockholders?
A. To vote on members for the board of directors.
B. To vote on major mergers and acquisitions.
C. To vote on changes in the corporate charter and proposals.
D. To vote on who will become chief executive officer (CEO).
Q:
In 2008 and early 2009, share values declined sharply as the global economy fell into a severe recession. This type of stock market is referred to as a:
A. Bull market.
B. Volatile market.
C. Bear market.
D. None of the above.
Q:
Investors may receive an economic benefit from the ownership of stock by receiving:
A. Interest.
B. Dividends.
C. Capital gains.
D. Both B and C, but not A.
Q:
Institutional investors are sometimes referred to as:
A. Main Street investors.
B. Wall Street investors.
C. Inside investors.
D. Outside investors.
Q:
Which of the following is not true about institutional investors?
A. Institutions invest their funds by purchasing shares of stock in corporations.
B. The proportion of institutional ownership of stock in the U.S. has declined slowly since the 1960s.
C. The U.S. government became an institutional shareholder when it acquired ownership of Citigroup and General Motors during the 2008 and 2009 bailouts.
D. Institutions accounted for 62 percent of the value of all equities owned in the U.S. in 2005.
Q:
Which of the following statements is not true about stockholders?
A. They are the legal owners of business corporations.
B. They own equal shares of company assets.
C. They are the part owners of the company.
D. Managers pay close attention to their needs and interests.
Q:
Stockholders have become an increasingly powerful and vocal stakeholder group in corporations.
Q:
In U.S. vs. OHagen, the court ruled that someone who traded on the basis of inside information when he or she knew the information was confidential was guilty of misappropriation.
Q:
The activism of institutional shareholders has often worsened company performance.
Q:
Institutional investors have little incentive to hold their shares and organize to change management policy.
Q:
Shareholders must rely exclusively on the board of directors to protect their interests.
Q:
Most boards now staff their compensation committees exclusively with outside directors and permit them to hire their own consultants.
Q:
The ratio of average executive to average worker pay tends to increase during recessions and fall back during periods of economic expansion.
Q:
Stock options represent the right to buy a companys stock at a set price for a certain period.
Q:
The Organization for Economic Cooperation and Development (OECD), representing 30 nations, issued a revised set of principles of corporate governance in 2004 to serve as a benchmark for companies and policymakers worldwide.
Q:
When boards of directors meet without management present, they are more likely to have completely candid discussions about a companys affairs.
Q:
It is the responsibility of the board of directors and its audit committee to engage an independent accounting firm to audit the financial statements prepared by management.
Q:
A corporation's stockholders have a right to inspect the company's books for any reason.
Q:
Investors always choose to invest in the stock of companies that pay high dividends.
Q:
Since the 1960s, there has been phenomenal growth in the numbers of institutional investors in the United States.
Q:
The three types of stockholders that own shares of stock in U.S. corporations are individuals, institutions, and government.
Q:
Who is to say that genetically modified foods are safe for human consumption?
Q:
Describe the ethical challenges regarding one of the following scientific breakthroughs: nanotechnology, human genome or stem cell research. Do the potential benefits of this breakthrough outweigh the potential costs?
Q:
How is the corporate Chief Information Officer a coach for the organization?
Q:
What have businesses done to address the number, severity, and ease of hacker attacks on firms?
Q:
Discuss the steps businesses and governments have taken to better protect stakeholder privacy.
Q:
It is critical for businesses to maintain information in a secure location and guard this valuable resource. How secure is information in a free-access information society. Are digital certificates or other detection systems sufficient to protect information from hackers?
Q:
In some economically developed countries and most developing countries around the world genetically modified food was:
A. Looked upon with caution but generally accepted.
B. Welcomed as a way to increase crop yields.
C. Rejected by most governments.
D. Viewed with extreme caution.
Q:
In 2008 the F.D.A. declared that food from cloned animals and their offspring was safe to eat, but:
A. Imposed a voluntary ban on the sale of cloned animals.
B. Challenged the ethical basis of cloning.
C. Required vendors to label meat from cloned animals as cloned.
D. Outlawed the sale of cloned meat until further testing confirmed its safety,
Q:
In 2005, the United Nations approved a declaration that:
A. Prohibited all forms of human cloning inasmuch as cloning is incompatible with human dignity and the protection of human life.
B. Called for the fate of therapeutic cloning to be determined by the individual nations.
C. Encouraged all forms of human cloning inasmuch as cloning is incompatible with human dignity and the protection of human life.
D. Prohibited reproductive cloning and mandated that further discussion on the issue be deferred for a couple of years.
Q:
The identification of human genes is critical to:
A. Early diagnosis of life-threatening diseases.
B. New ways to prevent illnesses.
C. Development of drug therapies.
D. All of the above.
Q:
According to the Center for Responsible Nanotechnology how many separate and severe risks are associated with nanotechnology.
A. Fifty.
B. Twenty-five.
C. Eleven.
D. Three.
Q:
Nanotechnology has aided in the development of the following products.
A. Under Armour.
B. Stain-resistant chinos.
C. Flying quadrobots.
D. All of the above.
Q:
The application of engineering to create materials on a molecular or atomic scale is:
A. Micro-biology.
B. Nanotechnology.
C. Micro-engineering.
D. Nano-atomic science.
Q:
According to Bill Joy, Sun Microsystems chief scientist, the 21st century technologies:
A. Are the safest and most human friendly know to civilization.
B. Must be controlled by the companies that invest in them to protect society.
C. Can be used for good if government and business work together.
D. Are so powerful they can spawn whole new classes of accidents and abuses.
Q:
In 2011 this region contained the highest commercial value of unlicensed (pirated) software:
A. Asia Pacific.
B. Latin America.
C. North America.
D. Western Europe.
Q:
The Motion Picture Association of America claimed that 44 percent of the industrys domestic losses came from illegal downloading of movies by:
A. Minority households.
B. Single-woman households.
C. Men between the age of 30 and 50.
D. College students and recent graduates.
Q:
According to The International Federation of the Phonographic Industry (IFPI), worldwide sales of music fell by how much in 2009?
A. 10 percent.
B. 35 percent.
C. 50 percent.
D. 75 percent.
Q:
The practice of downloading copyrighted songs was challenged because it: A. Created congestion and overloaded demands on the servers. B. Denied legitimate compensation to the recording artists. C. Favored major recording companies and selective artists over others. D. Resulted in bankruptcy for retail music outlets across the country.
Q:
In the United Kingdom offenders of software piracy and those who breach intellectual property rights face:
A. No penalty because there are no laws protecting software or intellectual property.
B. Fines up to 75,000 (nearly $100,000).
C. Fines of up to 50,000 (nearly $80,000) and/or a prison sentence of up to 10 years.
D. Mandatory prison sentence of 15 years.
Q:
This Act makes it a crime to circumvent antipiracy measures built into most commercial software agreements between the manufactures and their users:
A. Software Business Piracy Act.
B. Digital Millennium Copyright Act.
C. Intellectual Property Millennium Act.
D. Copyright Act of 1998.