MCQs

Question 1

Preferred Stock

Answer 1

Conveys an ownership interest in an entity

It does NOT require payment of dividends nor does it normally convey voting rights

Question 2

Objective of demand flow approach

Answer 2

Link process flows and manage them based on customer demand

Question 3

_______ systems include redundancy of components

Answer 3

Fault tolerant

Question 4

Digital signature

Answer 4

authenticates messages delivered in a networked environment using encryption

Question 5

Lead systems analyst

Answer 5

responsible for developing overall programming logic and functionality and all direct contact with end user

Question 6

Which one of the following forms of short-term financing is least likely to be considered a spontaneous source of funding?
	A.  Short-term notes payable.
	B.  Accrued taxes payable.
	C.  Accrued salaries payable.
	D.  Trade accounts payable.

Answer 6

Short-term notes payable

Spontaneous financing occurs automatically in the carrying out of day-to-day operations. Financing through the use of short-term notes payable does not occur automatically as a result of carrying out day-to-day operations, but rather requires negotiation with a lending institution, usually a commercial bank, and the execution of a promissory note. The other forms of payable occur spontaneously as a result of normal business operations.

Question 7

Which of the following types of risk can be reduced by diversification?

A.  High interest rates.
B.  Inflation.
C.  Labor strikes.
D.  Recession.

Answer 7

Risks that can be reduced by diversification (also called diversifiable risk or unsystematic risk) are risks that relate to a particular undertaking, firm or industry, and typically are not associated with macroeconomic conditions. Diversifiable risk are mitigated by engaging in multiple different investments or undertakings so that an unexpected unfavorable outcome of one investment or undertaking will represent only a small portion of all investments or undertakings and so that unfavorable outcomes on some investments or undertakings will be offset by favorable outcomes on other investments or undertakings. Labor strikes typically are peculiar to a particular undertaking, plant, firm or industry and are, therefore, diversifiable by having labor forces in other undertakings, plants, or industries.

Question 8

In which of the following geographical areas has the greatest decline in share of worldwide output occurred over the past 40 years?
A. U.S.A
B. Europe.
D. Asia.

Answer 8

B. Europe

Europe has had the greatest decline in share of worldwide output over the last 40 years. During that time, virtually all of the largest European producers have suffered declines in share of world output, totaling about 10%.
C. Latin America.
Latin America has not had the greatest decline in share of worldwide output over the last 30 years. During this period, the Latin American share of worldwide output has been fairly constant, at between 5% and 10% of worldwide output. Europe has had the greatest decline in share of worldwide output during this period.

Question 9

Letter of credit

Answer 9

A letter of credit is a conditional commitment to pay a third party in accordance with specified terms.

An importer of goods from a new foreign supplier would most likely use a letter of credit to assure the supplier of payment