Practice Exam

Question 1

T/F

The audit committee is a monitoring device for effective corporate governance

Answer 1

TRUE

Question 2

T/F

The CFO is a monitoring device for effective corporate governance

Answer 2

FALSE

It is top management that is monitored by corporate governance devices; therefore, it wouldn’t make sense for the CFO to be monitoring himself

Question 3

T/F

The SEC is a monitoring device for effective corporate governance

Answer 3

TRUE

Question 4

T/F

The External Auditors are a monitoring device for effective corporate governance

Answer 4

TRUE

Question 5

What makes up the Central Processing Unit (3 things)?

Answer 5

An arithmetic/logic unit, primary memory, and a control unit

Question 6

What does RAID stand for?

Answer 6

Redundant array of independent disks

Question 7

What is RAID?

Answer 7

A way of storing the same data redundantly on multiple magnetic disks

Question 8

T/F

A system that stores transactions in a single database, but processes them at various sites, is referred to as a centralized system

Answer 8

FALSE

Question 9

T/F

A system that stores transactions in a single database, but processes them at various sites, is referred to as a decentralized system

Answer 9

FALSE

Question 10

T/F

A system that stores transactions in a single database, but processes them at various sites, is referred to as a distributed system

Answer 10

TRUE

Question 11

An ____ (increase/decrease) in the cost of a financing source ____ (increases/decreases) the marginal cost of capital

Answer 11

Increase

Increase

Question 12

T/F

The exercise price is a determinant in valuing a call option

Answer 12

TRUE

Question 13

T/F

The expiration date is a determinant in valuing a call option

Answer 13

TRUE

Question 14

T/F

The forward contract price is a determinant in valuing a call option

Answer 14

FALSE

Question 15

T/F

The interest rate is a determinant in valuing a call option

Answer 15

TRUE

Question 16

____ involves categorizing tasks based on urgency

Answer 16

ABC Analysis

Question 17

What is an advantage of a sophisticated multiuser database?

Answer 17

Information may be retrieved quickly

Question 18

It is generally agreed that business cycles are caused by changes in____

Answer 18

aggregate economic output (expenditures)

Question 19

T/F

Quality risk is a risk of outsourcing a process to foreign operations

Answer 19

TRUE

Question 20

T/F

Language risk is a risk of outsourcing a process to foreign operations

Answer 20

TRUE

Question 21

T/F

Core Competency risk is a risk of outsourcing a process to foreign operations

Answer 21

FALSE

Question 22

T/F

Public Opinion Risk is a risk of outsourcing a process to foreign operations

Answer 22

TRUE

Question 23

T/F

Objective setting is a component of the COSO’s Integrated ERM Framework

Answer 23

TRUE

Question 24

T/F

Risk Response is a component of the COSO’s Integrated ERM Framework

Answer 24

TRUE

Question 25

T/F

Risk Assessment is a component of the COSO’s Integrated ERM Framework

Answer 25

TRUE

Question 26

T/F

Strategy Mapping is a component of the COSO’s Integrated ERM Framework

Answer 26

FALSE

This does not deal with RISK (Enterprise Risk Management Framework)

Question 27

____ is a combination of hardware and software that links to different types of networks

Answer 27

Gateway

Question 28

Which department would normally have the responsibility for a “help desk”

Answer 28

Operations Department

Question 29

This is a commercial disaster recovery service that allows a business to continue computer operations in the event of a computer disaster

Answer 29

hot site

Question 30

What’s the formula for CAPM?

Answer 30

Risk Free Rate +

(Expected Return - Risk Free Rate)/Beta