Test Answers on Business 101

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1. Computers that are manufactured in the United States and sold in Norway are categorized as U.S. ________.
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Exports
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During the past decade, the value of U.S. imports and exports has ________.
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More Than Doubled
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AusterTech, a U.S. company, produces computer parts and sells them to South American countries. AusterTech is engaging in the international business activity known as ________.
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Exporting
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Los Angeles-based PMI Telecom purchases cell phones manufactured in Asia and sells them in the United States. PMI is engaging in the international business activity known as ________
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Importing
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A large part of the U.S. economy’s growth comes from ________.
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The export and import of goods and services
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When a company operates in other countries, it ________ risk.
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Spread Out
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True or False: Absolute advantage is becoming more rare these days.
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True
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A trade deficit occurs when _____?
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Imports exceed exports
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A country with a balance of payments surplus means _____?
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Monetary inflow exceeds monetary outflow
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A countries exchange rate is based on _____?
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the rate at which its currency can be exchanged for currencies of other countries
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A country has a good chance of selling more of its goods abroad if it ________.
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Devalues it’s currency
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An understanding of religious holidays is essential in order to overcome ________ international trade barriers.
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Cultural
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True or False: Currency shifts are social and cultural barriers
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False
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One effect of the North American Free Trade Agreement (NAFTA) is:
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An increase in trade among the NAFTA member nations
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The European Union (EU) _____?
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wants to promote European citizenship as a complement to national citizenship
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Which of the following is the first step in the decision for a business to expand globally?
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Determining which foreign markets to enter
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The most common first step in engaging in international business is ____________.
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Indirect Exporting
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A U.S. electronics firm sets up a venture capital firm to fund promising British and Irish start-up companies. This is an example of ________.
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Direct Investment
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Which country features the most multinational corporations?
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United States
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When firms develop products and marketing strategies that appeal to the customer tastes and buying habits of particular national markets, they are using a ________.
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Multi-domestic Strategy
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________ is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
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Marketing
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A convenience store offers ________ utility by being open 24 hours each day.
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Time
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Place utility is created when?
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by having the good or service available at a convenient location when the consumer wants to buy it
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The location of a coffee shop franchise in a mall creates ________ utility.
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Place
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As the result of a hurricane heading toward the coastal area of North Carolina, residents rushed to purchase plywood to cover their windows. Retailers who carried plywood were operating in a ________.
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Seller’s Market
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The Tour of Hope is a cross-country bike tour designed to raise awareness about cancer clinical trials. Dasani bottled water is one of the sponsors, which enables the company to utilize ________ marketing.
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Event
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The marketing of a social concern or issue such as preventing child abuse is known as ________ marketing.
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Cause
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Which of the following is the first step in developing a marketing strategy?
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Identify a target market
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Data collected for the first time through observation or surveys is ________.
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Primary Data
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All of the following are internal sources of data EXCEPT what?
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Competitor’s Sales
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The common bases for segmenting consumer markets include all of the following EXCEPT ________ factors.
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End-use
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Desmond is developing several different marketing strategies based on target markets that differ in terms of lifestyles. He is segmenting the overall market by ________.
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psychographics
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Amazon.com keeps track of goods its customers have ordered. When a returning customer logs onto Amazon.com, the site creates a list of recommendations based on the customer’s purchasing history. Amazon is segmenting the market by________.
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Product
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14. ________ refers to the actions of consumers directly involved in obtaining, consuming, and disposing of products and the decision processes that precede and follow these actions.
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Consumer Behavior
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Interpersonal determinants of consumer behavior include all of the following EXCEPT ________ influences.
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Motivational
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True or False: Family influences are an interpersonal determinant of consumer behavior.
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True
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Personal and interpersonal determinants affect which step(s) in the consumer behavior process?
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Each step in the consumer behavior process
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When McDonald’s offered Madame Alexander gifts in its Happy Meals, both companies profited from the ________ arrangement.
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Comarketing
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A university offers alumni a special Visa card with the university’s logo printed on the front. Each time the cardholder uses the card, the university receives a small percentage of the amount charged. This is an example of ________.
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An affinity program
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Bailey seeks out cleaning products that are environmentally friendly and is willing to pay extra for a “green” brand. What is the main factor for Bailey’s purchase?
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Personal Determinants
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A bundle of physical, service, and symbolic attributes designed to satisfy customer wants is called ________.
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Product
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Consumer products are usually classified as ________.
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convenience products, shopping products, and specialty products
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Items that consumers purchase frequently, immediately, and with little effort are ________ products.
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Convenience
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Jan takes her car to Oil Express for an oil change. This is an example of a(n) ________.
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Consumer Service
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A combination of product lines represents a company’s ________.
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Product mix
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In a process called ________, products pass through a series of stages from their initial appearance to their decline.
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Product Life Cycle
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A brand that has been given legal protection is known as a ________.
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Trademark
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American Express is an effective brand name because it ________.
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is easy to pronounce, recognize, and remember
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________ is responsible for moving goods and services from producers to buyers.
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Distribution
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Raoul’s job is to make sure that his company’s goods get from the warehouse to retailers in a timely fashion. Raoul’s job involves the ________ function.
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Distribution
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The two major distribution channels are ________.
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Direct and marketing intermediary
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True or False: Makers of a product can contact customers cost effectively is not a benefit of a marketing intermediaries?
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True
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Vending machines are an example of ________.
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Automatic Merchandising
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The first step in developing a competitive retailing strategy is to ________.
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Identify a target market
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Which of the following is not a consideration when deciding which distribution channel is most efficient?
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Logistics
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Which of the following approaches would result in the fewest number of intermediaries?
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Exclusive Distribution
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The complete sequence of suppliers that contribute to creating and delivering a good or service is called the ________.
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Supply Chain
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Where does the supply chain begin?
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Delivery of raw materials
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Where does the supply chain end?
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Customer
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The activities involved with the actual movement of goods from the producer to the user are part of the ________.
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Physical Distribution
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In the U.S. financial system, which of the following is a net saver?
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Households
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Funds can be transferred between savers and users in two ways:_____________.
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Directly and indirectly
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_____ is a form of short-term financing sold by corporations, such as Salton Brands, that mature from 1 to 270 days after the date of issue.
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Commercial Player
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A _____ is a time deposit at a financial institution, such as a commercial bank, savings bank, or credit union.
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CD
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_____ are creditors of a corporation or government body.
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Bondholders
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The U.S. Department of Treasury sells what type of bonds?
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Government Bonds
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Bonds with ratings of BBB and above are classified as ____.
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Investment-grade bonds
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Other things being equal, the higher the interest rate, the _____ the price of a bond.
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Higher
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What provision allows the issuer to redeem the bond before its maturity at a specified price?
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Call Provision
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The most common type of order is called a ___. It instructs the broker to obtain the best possible price—the highest price when selling and the lowest price when buying.
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Market Order
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Which of the following is a depository financial institution?
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Credit Union
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Which of the following is a non-depository financial institution?
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Life Insurance Company
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Commercial banks obtain most of their funds from what?
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Depositors
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Sean made a purchase at his local Wal-Mart. Instead of writing a check, Sean used a card issued by his bank with a Visa logo on the front. He entered his PIN and the purchase was automatically deducted from his checking account. Sean used his ________ card.
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Debit
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Which of the following financial institutions is organized as a not-for-profit cooperative?
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Credit Union
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What is not included in M1?
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Money Market Mutual Funds
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The rate the Fed charges member banks for short-term loans is called the ________.
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Discount Rate
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The SEC requires virtually all new public issues of corporate securities to be registered. As part of the registration process for a new security issue, the issuer must prepare a ____.
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Prospectus
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_____ is defined as the use of material nonpublic information about a company to make investment profits.
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Insider Trading
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Financial markets are regulated by ___.
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All of the Above. (SEC, Professional Associations, Major Financial Markets)
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The financial manager for a typical corporation is responsible for ________.
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determining the most appropriate sources and uses of funds
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The senior financial manager has the title of ________.
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Chief Financial Officer
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Which of the following individuals has the direct responsibility for shareholder relations?
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Treasurer
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In the typical firm, the ________ is the chief accounting manager.
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Controller
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Which of the following is the best definition of financial risk?
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Risk is the uncertainty regarding the gain or loss from an investment.
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The gain or loss that results from an investment over a specified period of time is known as ________.
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Return
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The process that periodically checks actual revenues and expenses against forecast values is ________.
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Financial Control
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A(n) ________ is a document that specifies the funds a firm will need for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds.
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Financial Plan
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True or False: A companys financial plan should cover a contingency plan in case of bankruptcy
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False
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All of the following actions result in equity capital EXCEPT ________.
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Issuing Bonds
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Central Valley Pharmaceuticals needs to raise funds to buy new production equipment. The financial manager would probably suggest that his company raise debt capital by ________.
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Borrowing money from a bank
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Borrowing money ________.
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Creates Leverage
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All of the following are sources of short-term funds EXCEPT ________.
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Bonds
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When a firm receives goods or services from a supplier and agrees to pay for them at a later date, this arrangement is called ________.
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Trade Credit
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Short-term assets are expected to be converted into cash within _____.
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Year
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Mitch raises money from wealthy individuals and institutional investors for a variety of promising new companies. In exchange, he will become part owner of those businesses. Mitch is a(n) ________.
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Venture Capitalist
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The term used to describe the benefits produced by a merger or acquisition is _____.
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Synergy
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A(n) ________ is the reverse of a merger.
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Divestiture
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A(n) _____ is a transaction in which one company buys another.
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Acquisition
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_____ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.
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Private Equity Funds

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