Q1. What is "spam"? a. a form of firewall b. intellectual property c. junk e-mail d. a form of hacking e. wireless mooching Q2. Electronic conferencing is popular because it reduces travel expenses and saves money. Q3. What is a particularly sinister quality of spyware? a. It replicates itself, using up valuable computer memory. b. It often disguises itself as helpful software. c. It consumes bandwidth by flooding user inboxes with junk e-mail. d. It often leads to wireless mooching. e. It is completely legal. Q4. Who most often needs information in order to conduct technical projects? a. middle managers b. members of the board of directors c. top-level managers d. knowledge workers e. network administrators Q5. Which type of IT threat can spread without a computer user needing to open any software? a. worms b. Trojan horses c. spam d. spyware e. computer viruses Q6. What is the major limitation of Wi-Fi? a. high cost b. privacy concerns c. productivity
d. short range of distance e. installation challenges Q7. The application of electronic technologies for searching, sifting, and reorganizing pools of data to uncover useful information is called data warehousing. Q8. Which of the following BEST describes enterprise resource planning? units a. an information processing application for routine business activities of a company's business b. an information system for organizing and managing a firm's activities across product lines, departments, and geographic locations c. a system used for transforming data into information for use in decision making d. a computer-based electronic technology that assists in designing products by simulating a real product and displaying it in three-dimensional graphics e. an internal inventory of a company's product lines Q9. Which type of communication technology is attractive to businesses because it eliminates travel expenses? a. VSAT Satellite Communications b. extranets c. intranets d. electronic conferencing e. social networks Q10. Which of the following best describes a decision support system? a. a system that supports an organization's managers by providing daily reports, schedules, plans, and budgets that can be used for making decisions b. a quick-reference, easy-access application of information systems specifically designed for instant access by upper-level managers c. a system of hardware and software that imitates human behavior d. an interactive system that creates virtual business models for a particular kind of decision and tests them with different data to see how they respond e. a processor that plans production and delivery schedules Q11. Which of the following statements best explains how financial institutions create money? a. By opening new checking accounts and giving more people access to readily available cash, financial institutions expand the money supply.
b. By issuing money through government contracts, financial institutions expand the money supply. c. By taking deposits and loaning out these funds, financial institutions expand the money supply. d. By collecting interest on its accounts through investments, financial institutions expand the money supply. e. By giving interest from its accounts to its clients, financial institutions expand the money supply. Q12. As the government's bank, the Fed produces the nation's paper currency and lends money to the government. Q13. Which of the following statements best describes how the Automated Clearing House Network (ACH) maintains its integrity as a processor of electronic payments? a. The ACH network is an institution within the Federal Bank System and is regulated by strict government standards. b. The ACH network is a for-profit company and is regulated by its need to make a profit, which it can only do by strictly regulating itself. c. The ACH network is a financial institution and is thus regulated by its obligations to its investors. d. The ACH network is a not-for-profit association and is regulated by its independence from outside interests. e. The ACH network is a professional organization to which all financial institutions are obligated to contribute resources and is regulated by the interests of these institutions. Q14. David has a savings account and a home mortgage with a financial institution. Each year, this institution sends him a dividend check based on his accounts. Which of the following financial institutions is David using here? a. commercial bank b. savings institution c. credit union d. savings and loan association e. mutual savings bank Q15. Which of the following terms refers to the interest level at which member banks can borrow money from the Federal Reserve System? a. discount rate b. key rate c. prime rate
d. federal insurance premium e. reserve requirement Q16. Which of the following affects the value of money? a. how much currency is in circulation b. how many units the currency can be divided into c. how portable the form of currency is d. how durable the form of currency is e. how much currency has been saved Q17. The international payments process that moves money between buyers and sellers on different continents is subject to worldwide policy systems. Q18. Which of the following statements best describes why U.S. Treasury securities have always been considered risk-free investments? a. They are backed by the U.S. government. b. They have a guaranteed rate of return. c. They are easily sold. d. They are readily available for purchase. e. They earn a great profit on the international money market. Q19. An example of a point-of-sale (POS) terminal is when you go to the grocery store and the system transfers funds from your account to the store's account. Q20. Which of the following describes the requirements that the International Monetary Fund has made on certain developing countries? a. that the government decrease spending in order to bring inflation under control b. that private industries decrease prices in order to bring inflation under control c. that the government increase loans in order to create more money in the local markets d. that the local banks increase loans in order to create more money in the local markets e. that the government and private industries partner in creating more jobs in the region Q21. Which of the following statements is true about common stocks as investments? a. Stocks are among the riskiest of all investments.
b. Stocks are most suitable for investors who seek security. c. Stocks will never become worth less than their purchase price. d. Stock prices reflect only government action. e. Stock prices are easily manipulated. Q22. Trina is a loan borrower, and the terms of her loan say she must keep a portion of the loan amount on deposit with the bank in a non-interest-bearing account. What is Trina required to have? a. a compensating balance b. an unsecured loan c. an angel investor d. venture capital e. collateral Q23. In a secondary securities market, new stocks and bonds are bought and sold by firms and governments. Q24. Unlike the Dow and the S&P 500, all NASDAQ-listed companies, not just a selected few, are included in the index for a total of some 3,800 firms across six continents. Q25. The stock of Simonsen, Inc. is being bought up by an individual who intends to take over Simonsen and sell off its assets for a profit. What is the individual in this scenario called? a. angel investor b. corporate raider c. inside trader d. stock broker e. bondholder Q26. Because of the uncertainties involved in stock prices, investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value. Q27. What is the term for the proportion of funds invested in each of several investment alternatives?
a. spreading b. shorting c. margin buying d. asset allocation e. diversification Q28. What is the term for a division of stock that gives stockholders a greater number of shares but does not change each individual's proportionate share of ownership? a. stock dividend b. stock split c. stock yield d. stock warrant e. stock exchange Q29. Javier wants to invest, but wants to reduce his risk of loss by spreading the total investment across more stocks. Javier would be most interested in which of the following? a. spreading b. shorting c. margin buying d. diversification e. asset allocation Q30. Kim has investments in stocks, and wants to calculate her total return. What should she do? a. Divide the yearly dollar amount of dividend income by the investment's current market value. b. Compare the dividend against current yields from other investments. c. Subtract the cost of the stock from what she sold it for. d. Divide the current dividend payment plus capital gain by the original investment. e. Subtract current liabilities from current assets. Q31. The purpose of ethics in accounting is to maintain public confidence in business institutions, financial markets, and the products and services of the accounting profession. Q32. Which of the following bodies formulates the generally accepted accounting principles? a. Accounting Disclosure Board
b. Financial Accounting Standards Board c. Association of Certified Fraud Examiners d. Securities and Exchange Commission e. American Institute of Certified Public Accountants Q33. A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million. What is its owners' equity? a. $1 million b. $2 million c. $3 million d. $9 million e. $12 million Q34. The most liquid asset for a firm are marketable securities that can be sold very quickly. Q35. A company's owners invested $10,000 total into the company, which made a profit of $3,500 last year. Its total liabilities are currently at $7,000. What is the value of the total assets of this company? a. $3,000 b. $3,500 c. $6,500 d. $13,500 e. $27,500 Q36. Which of the following areas of the Certified Fraud Examiner (CFE) exam includes theories of fraud prevention? a. criminology and ethics b. financial transactions c. fraud investigation d. fraud litigation e. legal elements of fraud Q37. An asset is defined as any economic resource expected to benefit a firm or an individual who owns it.
Q38. Which of the following refers to the rules and procedures governing the content and form of financial reports? a. national bookkeeping standards b. core competencies for accounting c. accounting and financial rules d. national guidelines of accounting principles e. generally accepted accounting principles Q39. Revenue from the earnings of a particular transaction is able to be reported as soon as the product or service is delivered. Q40. Which of the following describes assets such as patents and trademarks? a. liquid assets b. fixed assets c. intangible assets d. current assets e. limited assets