Mktg 367 Ch 4
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Mktg 367 Ch 4

Course Number: MNGT 367, Summer 2011

College/University: Nicholls State

Word Count: 7898

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Chapter 4 1. Which of the following statements is TRUE? a. The United States has lagged behind most other developed nations in passing laws ban ning employment discrimination. b. No major federal employment discrimination laws have been passed since the IRCA in 1986. c. Legislation aimed at reducing discrimination in employment has still not eliminated discriminatory practices. d. Anti-discrimination legislation...

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4 1. Chapter Which of the following statements is TRUE? a. The United States has lagged behind most other developed nations in passing laws ban ning employment discrimination. b. No major federal employment discrimination laws have been passed since the IRCA in 1986. c. Legislation aimed at reducing discrimination in employment has still not eliminated discriminatory practices. d. Anti-discrimination legislation impacts HR almost exclusively in the areas of hiring and selection. 2. Laws passed long before the Civil Rights Act of 1964 that should have protected workers from employment discrimina tion include all of the following EXCEPT a. the right to due process. b. freedom of speech. c. the abolition of slavery. d. equal protection under the law. 3. ____ is a broad concept holding that individuals should have equal treatment in all employment-related actions. a. Equal employment opportunity b. Affirmative action c. Diversity management d. Cultural diversity 4. In its broad sense, discrimination means a. ethnocentrism. b. egalitarianism. c. recognizing differences among items or people. d. illegal employment practices. 5. Individuals who fall within a group identified for protection under equal employment laws and regulations, are members of a/an a. oppressed minority. b. protected class. c. employment caste. d. special treatment class. 6. Workers are protected by federal law against employment discrimination based on all the following characteristics EX CEPT a. age over 40. b. sexual orientation. c. religion. d. pregnancy. 7. A large commercial cleaning service in the Southwest requires all Hispanic applicants for supervisory positions to have a high school diploma from Mexico or from the U.S. or a G.E.D. U.S.-born applicants are not required to have a high school diploma or G.E.D. The purpose of this requirement is to insure that the Hispanic applicants speak English well enough to perform the job. This is an example of a. disparate treatment. b. a bona fide occupational requirement. c. disparate impact. d. a business necessity. 8. Borderline Cafeterias. Inc., has discovered that most of its wait staff is white, while most of its kitchen staff is minority. When interviewed by the local news anchor, the CEO of Borderline Cafeterias says, There has been no conscious or de liberate practice to staff the cafeterias in a discriminatory manner. It just happened to turn out this way. The CEOs argu ment is an example of a. disparate treatment. b. blind discrimination. c. disparate impact. d. discriminatory intent. 9. The landmark case that established the importance of disparate impact as a legal foundation of EEO law is a. Adarand Constructors v. Pena. b. Griggs v. Duke Power. c. University of California at Davis v. Bakke. d. McDonnell Douglas v. Green. 10. In a legal determination of whether discrimination has occurred, the ____ is most important. a. psychological impact on the worker b. state in which the alleged discrimination occurred c. outcome of the practice d. intent of the employer 11. If members of a protected class are under-represented in the workplace, the condition of ____ exists. a. discriminatory intent b. disparate treatment c. disparate impact d. statistical bias 12. A practice necessary for safe and efficient organizational operations is called a/an a. economic viability requirement. b. business necessity. c. prerogative of management. d. bona fide occupational qualification. 13. Walter, a manager of a bookstore, is considering which of his subordinates should be transferred from the day shift to the evening shift in order to meet increased customer demand during evening hours. The evening shift workers receive a 10 percent pay differential for working these less-desirable hours. Walter has decided to assign George to the evening shift instead of Laura, because Laura has children and Walter thinks she would prefer to be home during the evenings. Walters action can be considered a. implicit bias. b. intentional discrimination. c. business necessity. d. objective disparity. 14. Ingrid is a recent immigrant from Denmark with a valid U.S. work permit. She has applied for work on the wait staff at a Chinese restaurant near her home. Ingrid doesnt have a car, and this restaurant is one of the few employers she can walk to. Ingrid was turned down for an opening at the restaurant, although she has relevant job experience. Later, Ingrid noticed a Chinese man was hired for the job. Ingrid should a. sue because this is sex discrimination. b. sue because this is national origin discrimination and violates the IRCA. c. not sue because this is an English-only workplace and Ingrids English language skills are minimal. d. not sue because Chinese origin is a bona fide occupational qualification in this case. 15. A bona fide occupational qualification for the job of truck driver for a beer distributing company would include all of the following EXCEPT a. possession of a commercial drivers license. b. a bachelors degree in any field. c. the ability to lift a minimum of fifty pounds. d. basic literacy. 16. Mary is a pregnant Muslim Malaysian woman with controlled mild diabetes who wears a garment covering her from head to feet in conformance to her religion. Mary has a valid visa allowing her to work in the United States, and she is married to an officer in the U.S. Air Force. Mary applied to an airlines flight attendant training program and was denied. On which factor would be it LEGAL to reject Mary from the training program? a. her diabetes b. her pregnancy c. her national origin d. her clothing 17. In order to ward off a complaint of discrimination, every requirement for employment must be a. benchmarked against industry best practices. b. approved by the EEOC. c. consistent with past practice in the company. d. directly job related. 18. Which of the following would be defined as retaliation under EEO laws? a. A hospital demotes a radiology technician who has complained about ethnic discrim ination. b. An employer fires a supervisor who discriminates against a protected-class member. c. A dismissed employee files a false complaint of discrimination with the EEOC. d. The EEOC targets an employer with a history of unlawful discrimination. 19. When does the burden of proof fall on the employer in a disparate impact or disparate treatment suit? a. when there is an Affirmative Action Plan in place b. when it is a class action suit c. when the case goes to court before a jury. d. when the court rules that a prima facie case has been made 20. Albert is an assistant store manager for a national discount retailer. When Albert was denied a promotion to store manager he filed a claim based on religious discrimination with the EEOC, which was eventually denied. After the claim, Albert was transferred to be the assistant store manager at a location requiring a 97-mile round trip commute that takes about four hours of travel time per day. His previous worksite had been only 15 minutes from his home. a. Since Albert retained his position in the company as an assistant store manager and he kept the same pay level, this is not retaliation. b. This action is ex post facto evidence of retaliation. c. The employer is not vulnerable to a charge of retaliation because Alberts charge of dis crimination was denied. d. This action could be considered retaliation. 21. Albert hopes to establish a prima facie case for discrimination in promotion. Albert can assert all the following as support ing this claim EXCEPT the fact that a. he is Jewish. b. his 10-year-old daughter is infected with AIDS. c. he met all the official requirements for the position. d. no other Jewish employees have been promoted at this company. 22. The most fundamental anti-discrimination employment law, the one that is considered the keystone for following legisla tion, is the a. Fourteenth Amendment of the U.S. constitution. b. Civil Rights Act of 1964. c. Executive Order 11246. d. Equal Pay Act of 1963. 23. Henry, an upper-level manager at a software design firm, is talking informally with his colleagues over dinner. The idea of quotas makes me uncomfortable, he says. I think that we should just treat everyone equally, regardless of how people vary from one another. A person is a person. Henry is expressing the philosophy behind a. affirmative action programs. b. cultural diversity. c. the blind to differences approach. d. racist and sexist organizational practices. 24. Costa Laguna Manufacturing follows a policy of hiring people based on their race, age, gender, and national origin in or der to make up for historical discrimination. This is an example of a. affirmative action. b. fair employment practices. c. institutional diversification. d. the blind to differences approach. 25. All of the following types of organizations fall under Title VII EXCEPT a. private religious educational institutions. b. private employers of 15 or more persons. c. agencies of the federal government. d. national labor unions. 26. The 1991 Civil Rights Act requires that plaintiffs bringing discrimination charges must a. show a pattern of discrimination against a particular protected class. b. identify the particular employer practice being challenged and that protected class status played some role. c. identify majority-group members who benefited from the illegal actions. d. provide evidence of financial harm caused by the employer's actions. 27. The president of a consulting firm has deliberately kept the number of full and part-time employees of his firm to twelve. This means he does NOT have to comply with a. the ADEA b. the ADEA or the ADA. c. the ADEA, the ADA, or Title VII. d. the ADEA, the ADA, Title VII, or the Pregnancy Discrimination Act. 28. Under the 1991 Civil Rights Act, employers must show that an individual's race, color, religion, sex, or national origin a. was not the deciding factor in the employment decision. b. did not limit that individual's employment options. c. caused no financial hardship to the individual. d. played no role in their employment practices. 29. The ____ allows victims of intentional discrimination on the basis of sex, religion, or disability to receive both compens atory and punitive damages. a. Civil Rights Act of 1991 b. Americans with Disabilities Act c. Title VII, Civil Rights Act of 1964 d. Executive Order 11246 30. A/an ____ is issued by the president of the United States to provide direction to government departments on a specific area. a. federal mandate b. presidential directive c. legislative initiative d. executive order 31. A government contractor operating in Iraq has been accused of discriminating against women its hiring and promotion practices. Which agency would investigate and enforce the relevant law in this case? a. The Office of Federal Contract Compliance Programs b. The U.S. Contracts and Agreements Agency c. The Equal Employment Opportunity Commission d. The National Labor Relations Board 32. The major provision of the Pregnancy Discrimination Act of 1978 is that a. pregnant employees are to be given 12 weeks family leave without pay. b. pregnant employees are entitled to 12 weeks of paid maternity leave. c. maternity leave is to be treated the same as other personal or medical leaves. d. employers can not discriminate against employees based on marital status.. 33. With respect to U.S. citizens working abroad for U.S. employers, the 1991 Civil Rights Act a. requires U.S. employers to treat its employees consistently with local laws and cultural mores, regardless of U.S. employment laws. b. extends coverage of U.S. EEO laws, except where local laws conflict. c. does not apply internationally. d. takes precedence over local laws. 34. Emily works for a small architecture firm that has a dozen employees. Emily has discovered that she is pregnant. Which of the following statements is true under the Pregnancy Discrimination Act? a. If the employer has a medical leave program for other circumstances, it must treat Emilys pregnancy the same way. b. Emily has job protection when she returns from maternity leave if she is one of the firms architects, not if she is an hourly employee. c. Emily has job protection when she returns from maternity leave if she is an hourly em ployee, and not one of the firms architects, who are professionals on salary and thus not protected by the PDA. d. Emily is not protected by the PDA. 35. Which of the following has been a general ruling in cases filed under the Pregnancy Discrimination Act? a. Employers are not required to accommodate the needs of pregnant employees. b. Pregnancy is a disability requiring special accommodation. c. Women must be assigned less strenuous tasks during pregnancy. d. Employers must treat pregnant employers the same as non-pregnant employees with similar abilities or inabilities. 36. For purposes of job similarity under the Equal Pay Act, jobs must have a. identical job titles. b. comparable requirements for KSAs. c. a common core of tasks. d. similar value of contributions to the organization. 37. The Equal Pay Act, enacted in 1963, requires employers to a. pay similar wage rates for similar work without regard to gender. b. establish pay rates based upon merit rather than seniority. c. conduct wage and salary surveys to ensure pay equity. d. ensure that older employees are not discriminated against in compensation. 38. According to the concept of ____, the pay for jobs requiring comparable levels of knowledge, skill, and ability should be similar even if actual duties differ significantly. a. equal pay b. pay equity c. comparable compensation d. gender fairness 39. Jolie is a day-care worker for infant children with disabilities. She has an undergraduate degree in early childhood educa tion and has Red Cross certification for emergency first aid. She is responsible for the well-being of five disabled children 40 hours a week. Jeffrey is an employee of the city zoo where he works in the primate nursery. Jeffrey has an undergradu ate degree in primatology and has Red Cross certification for emergency first aid. Jeffrey has the care of five infant chim panzees. Jolie is paid $10 an hour. Jeffrey is paid $20 an hour. Which of the following statements is TRUE? a. This is a pay equality issue because there is a common core of tasks between the case of disabled children and infant chimpanzees. b. This is a pay equality issue because human children are more important to society than are infant chimpanzees. c. This is an example of pay inequity because Jeffery and Jolie both have undergraduate de grees and Red Cross certification, giving them identical KSAs. d. This is an example of pay equity because primatology degrees are more scarce than are degrees in early childhood education. 40. All of the following conditions are required to constitute a incident of sexual harassment EXCEPT a. physical contact has taken place between the harasser and the victim. b. the actions create a hostile environment. c. the actions are sexually directed. d. the actions are unwanted. 41. Statistically, a woman who is the same age, and has the same educational level, experience level and seniority as a man can expect to earn ____ % of his pay. a. 60 b. 77 c. 85 d. 90 42. All of the persons below would be classified as disabled EXCEPT a a. morbidly obese person. b. person who has been hospitalized for depression. c. person who is legally blind without his glasses. d. person who has epilepsy. 43. During a trip to China, Kevin became very ill and had to be treated for several days in a Chinese hospital. During the course of treatment Kevin received several blood transfusions. Kevin is now back at work in the U.S., but rumors in the workplace are spreading that the reason Kevin is constantly fatigued and subject to colds is because he caught AIDS from the transfusions. For this reason, Kevin was passed over for promotion because the supervisor of that department did not want to work with a person with AIDS. Is Kevin covered by the ADA? a. Yes, but only if Kevin really has AIDS. So Kevin needs to have an AIDS test to clarify his medical condition. b. No, because Kevin hasnt had an AIDS test, so his actual medical condition is not known. c. Yes, Kevin is covered by the ADA because some coworkers think he has AIDS, even though he may or may not actually have AIDS. d. No, because the real causes of the rumors about Kevin are his fatigue and his frequency of colds. Colds and fatigue are transitory and are not covered by the ADA. 44. The fundamental job duties of the employment position that an individual with a disability holds or desires are called a. core job duties. b. essential job functions. c. reasonable accommodations. d. minimum job requirements. 45. Which of the following statements is TRUE? a. It is currently illegal under the ADA for employers to test employees for genetic character istics. b. Employers can legally test employees for genetic characteristics, but they cannot take any actions on the results if the employee would be negatively impacted. c. Employers can legally test employees for genetic characteristics and make decisions based on these tests. d. Genetic tests are legally allowed only if employers can demonstrate business necessity. 46. ____ is the modification or adjustment to a job or work environment that enables a qualified individual with a disability to enjoy equal employment opportunity. a. Access improvement b. Workplace restructuring c. Job modification d. Reasonable accommodation 47. If accommodating a disabled person imposes significant difficulty or expense on an employer, the employer a. can claim undue hardship exists. b. may apply for federal grant money to make the accommodation. c. will be responsible for finding alternate work for the disabled person. d. may reduce the salary of the disabled person to compensate. 48. Medical information on employees a. must be maintained off-site. b. must be filed with the employees other confidential data. c. must be maintained in files separate from general personnel files. d. must be accessible only by Human Resources staff and the employees direct supervisor. 49. A large federal contractor is hiring individuals to provide security for relief workers at the site of a natural disaster in the U.S. a. The ADA would allow pre-employment medical exam in this case because the job is paramilitary. b. The ADA would not allow medical exams (except for drugs) until a conditional job offer was made. c. The ADA would allow a pre-employment medical exam because the employee would be an employee of a contractor for the federal government, and the ADA does not apply to governmental agencies. d. The ADA would allow a pre-employment medical exam if it was used in the context of a preliminary fitness-for-active-duty test. 50. Which of the following questions to job applicants is LEGAL under the ADA? a. How many times were you absent due to illness in the last two years? b. What was the reason for your medical discharge from the Army? c. I see you are wearing a cast on your arm. Why? d. Describe how you would lift a 50-pound dog onto an examination table with or without accommodation. 51. The CEO of Ponchatoula Confections, a non-unionized company, is conferring with the vice-president of HR about inev itable layoffs due to long-term declines in orders. The CEO wants to lay off poor-performing employees first. Looking at the list of employees and their performance rankings, the CEO sees Carls name. Carl has had consistently below-average performance appraisals for the last five years. Carl is 72 and has been with the firm 41 years. The CEO says, What about Carl? The vice-president of HR advises the CEO a. Dont touch Carl, he is protected by the ADEA because he is over 70. b. You can consider Carl for layoff because of his long-term poor performance. c. The ADEA protects employees who have over 40 years seniority with the firm. We cant lay Carl off. d. The ADEA requires employers to lay off employees in order of reverse seniority, so Carl must be retained while more junior employees are laid off. 52. The Age Discrimination in Employment Act protects individuals over the age of a. 40. b. 50. c. 65. d. 70. 53. All of the following are requirements of the Older Workers Benefit Protection Act when an employee signs a waiver promising not to sue for age discrimination if he/she takes early retirement EXCEPT a. the agreement must be written and clearly understood. b. the employee must be advised to consult an attorney. c. the employee must have at least 21 days to consider the offer. d. the employee has up to 30 days to revoke the agreement after signing. 54. The Immigration Reform and Control Act a. permits employers to hire only U.S. citizens. b. requires employers to pay prevailing U.S. wages to immigrants holding the appropri ate visas. c. prevents employers from discriminating against undocumented aliens. d. allows an employer to discriminate based on national origin. 55. A prestigious U.S. university wishes to hire a noted foreign scientist to teach and research in its environmental sciences program. This scientist has unique KSAs and will not displace any U.S. scientist. What must the university do to hire this individual? a. The university must determine if the scientist has an H-1B visa. b. The employer must have a scientific organization sponsor the scientist. c. The scientist must be investigated and cleared by the Department of Homeland Security, even if the scientist already holds a valid work permit. d. The university will be unable to hire this individual because no scarce skills visas are al lowed by the IRCA since the Patriot Act was passed after 9/11. 56. Which of the following companies or institutions would be allowed to discriminate on the basis of religion? a. police departments. b. Carmelas Kosher Cuisine. c. airlines with international routes. d. St. Marys Academy for Girls. 57. In TWA v. Hardison, the Supreme Court ruled that an employer must make reasonable accommodation for a. a disabled person. b. an employee's religious beliefs. c. an employee infected with HIV. d. the domestic partner of an employee. 58. Which of the following is FALSE with respect to the physical appearance of employees? a. Men who wear beards for religious reasons can usually be required to shave them. b. Obesity may be considered as a disqualification for a job if excess weight prevents satis factory job performance. c. An employer can reject an applicant because he/she too short to safely use the required equipment. d. Generally, courts have allowed dress codes as long as they are applied uniformly. 59. The Uniformed Services Employment and Reemployment Rights Act requires a. b. c. d. employers to continue employees pay while he/she is on military leave. employees to notify their employers of their military service obligations. employers to give preference in hiring to applicants who have served in the military. employees who are permanently disabled as a result of their military service to be auto matically enrolled in the employers retirement program. 60. Which of the following statements is TRUE with regard to sexual orientation and gay rights? a. The Supreme Court has not decided whether gay men and lesbians have rights under the equal protection amendment to the U.S. Constitution. b. Transvestites are considered disabled under the ADA. c. Federal law prohibits discrimination based on sexual orientation. d. State and city laws banning discrimination based on sexual orientation have typically been held invalid by the individual state supreme courts. 61. Touchdown Plastic Molding has experienced a 2-year long downturn in orders. As a result, layoffs are unavoidable. At Touchdown, almost every employment decision takes seniority into account: promotions, transfers, pay raises, vacations, etc. So, the company wishes to lay its employees off in reverse order of seniority. That is, the newest employees would be the first to be laid off. Touchdowns newer employees in general are younger, but they also include minorities and women of all ages. Most of the senior employees are white males. Which of the following statements is TRUE? a. Touchdown can lay off junior employees because it has consistently used seniority in employment decisions. b. cannot Touchdown use seniority to lay off its employees because it will violate Title VII by disparately impacting protected classes. c. If Touchdown lays off senior employees it will violate their psychological contract and the employer can be sued for damages. d. Touchdown cannot lay off any employees because it will violate Title VII or the ADEA. It must rely on attrition to reduce the number of employees. 62. A rule that employees in certain jobs can not have a body mass index (indicating obesity) above a certain level would be LEGAL if a. the job is in the healthcare industry. b. employee weight can be correlated with increased benefit expense for the employer. c. the body mass index requirement is the same for male and female employees. d. the job cannot be adequately-performed by obese individuals. 63. Which of the following is TRUE with regard to conviction and arrest records? a. Using conviction records has been shown to be illegal discrimination. b. All convictions may be considered in employment decisions. c. In general, only job-related convictions can be considered in employment decisions. d. Recent job-related arrests may be considered in employment decisions. 64. Which of the following questions is it ILLEGAL to ask a job applicant? a. Who should we contact in an emergency? b. Are there any current employees here who are related to you? Who are they? c. What rank did you achieve in the military? d. Where can we contact you? 65. Susan, the school principal, is interviewing applicants for a position as an elementary school teacher in an isolated rural community in North Dakota. Which of the following questions is LEGAL? a. Are you married? It is really hard to meet single people out here, and we have had a lot of single teachers quit. b. Most people here are church-goers. We find that our teachers fit better into the community if they have the same values. Would you be active in any of the churches here? c. All of our students are native-English speakers. What language do you speak and write fluently? d. Have you ever been arrested for child abuse, child pornography, or any other sex offense? 66. Under the Uniform Guidelines on Employee Selection, there are two ways an employer can choose to prove it is not illeg ally discriminating against employees. These are a. validity and reliability of tests. b. prima facie evidence and bona fide occupational requirements. c. no disparate impact and job related validity of employment tests. d. no adverse impact and no disparate treatment. 67. Typically, employers check for disparate impact in all the following internal activities EXCEPT a. candidates selected for interviews from the group of applicants. b. promotions. c. terminations. d. use of FMLA leave. 68. The relevant labor market for a company is a. the region where the firm recruits workers. b. the area where current employees live. c. the area where any potential qualified applicant lives. d. the standard metropolitan area determined by the last census. 69. If a company has external disparate impact, it means a. fewer than 4/5ths of its employees are members of protected classes and it needs to recruit more minorities from the relevant labor market. b. the employer has intentionally hired fewer minorities than it should have, so much so that minorities comprise less than 4/5ths of the proportion they should given the composition of the relevant work force. c. at least one category of minority employees makes up less than 4/5ths of the propor tion that minority makes up in the relevant labor market. d. the company too many of one minority class in comparison to the other minorities, thus giving rise to an illegal favored minority situation. 70. A large daily newspaper with a national market employs many staff reporters. Annual hiring rates are fairly high because there is high turnover among the reporters as they are promoted or are hired away by other newspapers. Last year, 37 men applied for reporter positions; 8 were hired. Twenty-two women applied for reporter positions and 6 were hired. Calculate the selection rates for men and women. Is there evidence of disparate impact for women? a. Yes, there is disparate impact. The number of women hired is 75% of the number of men hired. b. Yes, there is disparate impact because at least 4/5 of the female candidates should have been hired, i.e., 18 candidates. c. No, there is no disparate impact because the selection rate for women is actually higher than that for men. d. No, there is no disparate impact because six of the men were hired as sports or political re porters, and these are traditionally male-dominated jobs. 71. On applying for a job as an assistant designer with a noted U.S. designer of wedding and ball gowns, Schubert was re quired to bring in a portfolio of his dress designs, including drawings, photographs, and several completed garments. This represents a. an employment test that estimates the reliability of Schubert work. b. a content-valid employment test for this job, because Schubert is presenting a work sample. c. test-retest reliability, because each item in the portfolio represents a different test. d. an example of criterion-related validity, where Schuberts future performance is the cri terion and the portfolio items are the predictors. 72. A test has ____ if it reflects an actual sample of the work done on the job in question. a. reliability b. criterion validity c. content validity d. validity generalizability 73. The EEOCs policy guidelines are a. federal law. b. persuasive authority. c. optional suggestions for HR practitioners. d. equivalent in power to an executive order. 74. The major purpose of the OFCCP is to a. monitor affirmative action programs in state and local governments. b. help the victims of unlawful discrimination to file claims and obtain relief. c. handle in the public sector all functions that the EEOC handles in the private sector. d. require that federal contractors and subcontractors use non-discriminatory prac tices. 75. In measuring criterion-related validity, a test is the ____ and the desired KSAs and measures of job performance are the ____. a. validator; job statistics b. predictor; criterion variables c. X-variable; Y-variables d. instrument; predictors 76. Orson wishes to be accepted into the management training program at his company. The company has a mathematical skills test. Orson took the test April 2 and received a score of 56%, which was below the cutoff score. The next time the test was given, October 11, Orson scored 89% and was accepted into the program. Orson had not done any studying between the test in April and the test in October. Which of the following statements is probably TRUE? a. This test had poor test-retest reliability. b. This test had poor content validity. c. This test was reliable. d. The criterion variable was invalid. 77. While Edith, the manager of HR for a large insurance company, was on vacation, her new intern decided to straighten out the bulging files in the file room. He went through all employee records and discarded all records from people who ap plied for jobs, but who were rejected, and he discarded all information about current employees that was more than five years old. To maintain confidentiality of the files, the intern had all the discarded material shredded. a. Everything the intern did was within EEOC guidelines. b. The intern was correct in discarding the rejected applicants records, but he should have kept all of the current employees records. c. The intern was probably within EEOC guidelines with his 5-year cut off for current employee files, but he should have retained the rejected applicants records. d. The intern was correct in shredding the rejected applicants records, but current employee records should be kept on-site for a minimum of three years, and then in a safe storage loc ation for another 10 years in order to comply with EEOC guidelines. 78. All of the following employers must file an annual EEO-1 report with the EEOC EXCEPT a. all state government agencies. b. all employers with 100 or more employees. c. Federal contractors with at least 50 employees and contracts of at least $50,000. d. Financial institutions with at least 50 employees in which government funds are held or savings bonds are issued. 79. In order to effectively defend itself against a charge of discrimination in the recruiting and selection of members of protec ted classes, an organization should a. provide exit interview summaries. b. keep job evaluation data. c. maintain applicant flow data. d. design subjective applications. 80. When Clark discussed his disturbing situation at work with a representative of the EEOC, the representative told him that the EEOC would make a decision as to how Clarks complaint should be categorized. The EEOC representative explained all of the following complaint categories EXCEPT a. frivolous. b. immediate dismissal. c. needing further investigation. d. priority. 81. Yvette considers that she was passed over for a promotion because she is a woman over 40. She learned of the decision on August 1, 2007. She has until ____ to file her complaint with the EEOC. a. August 31, 2007 b. January 26, 2008 c. July 31, 2008 d. August 1, 2009 82. After the EEOC investigates a complaint and finds sufficient cause that the alleged discrimination occurred, its next step is to a. sue the employer in federal court. b. issue a right-to-sue letter to the complaining employee. c. offer mediation of the dispute to the two parties. d. decide on a remedy for the wrongdoing. 83. The ultimate authority in interpreting the EEO laws is a. the president. b. the U.S. Supreme Court. c. the EEOC. d. the Congress. TRUE/FALSE 1. As diversity in the workplace increases, employment discrimination has decreased because workers have higher comfort levels in interacting with a wide variety of people. Register to View Answer2. The United States is one of the few nations that has laws forbidding discrimination in the workplace. Register to View Answer3. A legal defense against a charge of employment discrimination is lack of intent to discriminate. Register to View Answer4. The burden of proof shifts to the employer once the court rules that a prima facie case of discrimination has been made by the plaintiff. Register to View Answer5. The intent of affirmative action is to make up for historical discrimination. Register to View Answer6. Executive orders have typically been used by presidents to allow large government contractors to operate without con forming to anti-discrimination laws. Register to View Answer7. The Civil Rights Act of 1991 allows plaintiffs both punitive and compensatory damages in some circumstances. Register to View Answer8. Anti-discrimination laws that apply only to federal contractors take the form of Executive Orders. Register to View Answer9. From a legal point of view, sexual harassment is considered employment discrimination. Register to View Answer10. The EEOC is responsible for requiring that federal contractors take affirmative action to overcome the effects of prior dis crimination practices. Register to View Answer11. If it is illegal in a certain country for women to drive cars, the 1991 Civil Rights Act requires that American women work ing for a U.S. company operating in that country also not drive cars, even if that is typically a duty of the jobs they hold. Register to View Answer12. The Equal Pay Act prohibits employers from having different pay rates based on race. Register to View Answer13. Although the Pregnancy Discrimination Act requires employers to treat maternity leave the same as other medical leaves, it does not require insurance coverage for prescription contraceptives under employer-provided health plans. Register to View Answer 14. The driver of a truck that makes liquor deliveries to a local casino has been making lewd comments and suggestions to one of the female employees who works on the receiving dock. The HR department has no responsibility regarding this type of action because the truck driver is not an employee of the company. Register to View Answer15. Clara has complained to the HR manager that her supervisor, Roberta, is making unwanted sexual advances to her and has created a hostile work environment. Claras situation may be considered sexual harassment. Register to View Answer16. Obesity is not considered as a disability under the ADA because this condition is caused by the individual and can be changed by the individual. Register to View Answer17. For years after she broke her hip in a car wreck Becky was addicted to prescription pain medication. Now, Becky is free of her addiction, but she continues to attend a 12-step program to stay drug free. Becky is covered by the ADA. Register to View Answer18. A staff attorney for a large commercial real estate development firm has returned from military duty in Iraq with injuries to both hands that prevent her from using a keyboard. Equipping her computer with voice recognition software that will allow the attorney to do carry out her job duties will cost over $3,000. The firm can refuse to accommodate the attorneys disability because this would be an undue hardship. Register to View Answer19. Federal law prohibits employers from using genetic test results to exclude individuals from certain jobs if they have genet ic conditions that increase health risks. Register to View Answer20. Claudette is 59 years old. Since her job description was changed to include customer relations duties, her performance has declined. Over the past year Claudette has been counseled by her manager, sent to training, and received warnings about her poor performance. Claudettes performance is still not acceptable and there are no appropriate positions available for her to be transferred into. The employer will not be subject to an age discrimination claim if it discharges Claudette at this point. Register to View Answer21. Because of the Baby Bust following the Baby Boom, older workers are becoming more valuable to employers as the pool of younger workers shrinks. Consequently, discrimination complaints under the ADEA are declining. Register to View Answer22. Clara, an accounts receivable clerk at a large insurance agency, has just converted to a religion which requires women to wear modest clothing (high-necked, long-sleeved tops, below-knee length skirts, closed-toed shoes, and a small bonnet that covers her hair). Claras employer must provide reasonable accommodation and allow Clara to wear her garb, even though some of her coworkers are annoyed at Claras ostentatious modesty. Register to View Answer23. A highly-skilled foreign research scientist in the field of optics could be hired by a U.S. firm if he could be granted an H1B visa. Register to View Answer 24. Shirley is a member of the Marine Reserve. She was concerned that she would not be hired if the company knew that she was in the reserves and could be called up for active service at any time. So, she did not tell the employer that she was a reservist. After she had been with the company for eight months, Shirleys unit was called to go to Iraq. Her employer ter minated Shirleys employment when it learned of Shirleys military status. Shirley can charge her former employer with violation of the USERRA. Register to View Answer25. Armand is a transgender man employed as a security guard at a large bank. Armand has applied to be a supervisor, but he has been rejected on the basis that the other security guards would not be comfortable taking orders from a transgender person. Armand can to sue his employer under the Civil Rights Act of 1991. Register to View Answer26. Archie, a member of a protected class, was convicted and served time in federal prison for tax fraud and evasion. Now that he is out of prison, Archie has applied for a machine maintenance job with a construction firm which builds pipelines. Archie is highly qualified for the work. If the employer rejects Archie on the basis of his felony conviction, it may be sub ject to a suit for discrimination. Register to View Answer27. The Uniform Guidelines are used by enforcement agencies to examine recruiting, hiring, promotion, and many other em ployment-related practices. Register to View Answer28. The Uniform Guidelines on Employee Selection Procedure apply only to organizations under the jurisdiction of the EEOC. Register to View Answer29. If the selection rate for a protected group is more than 80% of the selection rate for the majority group, this is evidence that discrimination exists. Register to View Answer30. According to the Uniform Guidelines on Employee Selection Procedures, employers are required to maintain close pro portionate equality in the composition of their work force to the relevant labor market. Register to View Answer31. The major reason that external disparate impact must be calculated by the firm is in case an employee brings a lawsuit and the EEOC subpoenas the data. Register to View Answer32. An "employment test" is defined as any paper-and-pencil test that an employer may use prior to making a hiring decision. Register to View Answer33. Content validity is a logical, non-statistical method used to identify the KSAs and other characteristics necessary to per form a job. Register to View Answer34. We Do Wonderful Windows is a custom window treatments firm employing two designers, five seamstresses, two in stallers and an office manager. All the employees are female. Wonderful Windows does not have to maintain any records for EEO compliance purposes. Register to View Answer35. The minimum time period for retaining employment records varies, but the rule of thumb is to keep documents that are less than five years old. Register to View Answer36. To meet minimum EEO guidelines employers must have a written EEO policy statement which is available to all employ ees upon request. Register to View Answer37. Sometimes employees want to pursue a discrimination case under state law rather than under federal law because there may be greater remedies under state laws. Register to View Answer38. Since it is illegal to collect information on applicants protected class data, applicant flow data is primarily based on inter viewer assessment of applicants age, race and national origin. Register to View Answer39. Mediation between employers and employees conducted by the EEOC has resulted in faster resolution of EEO-based complaints. Register to View Answer40. Whichever side loses a discrimination trial in federal court, it has the option to appeal the decision, perhaps as high as the U.S. Supreme Court. Register to View AnswerESSAY 1. Why are some forms of discrimination among applicants or employees legal and productive for the organization and why are some forms of discrimination illegal? ANS: In its most general usage, discrimination means recognizing differences among people. In an employment setting, the organization would wish to find the applicants with the highest levels of the applicable KSAs. In addition, the organiza tion would wish to reward and promote employees with the highest productivity and encourage unproductive employees to leave. To do this, the organization must discriminate between high and poor performers. Illegal discrimination occurs when (1) different standards are used to judge different individuals or (2) the same standard of judgment is used, but it is not related to the individuals job. Illegal discrimination is clearly not in the organizations economic interest, because in dividuals are not judged on their future or current performance but on their personal characteristics. PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking TOP: Conceptual REF: p. 99-102 OBJ: 1 LOC: Legal Responsibilities 2. Discuss the following statement with reference to EEO laws and regulations: "This is my business ... I founded it ... I ought to be able to hire and fire whomever I choose without interference from the government." ANS: An assortment of federal, state, and local laws limits the ability of a business to hire and fire at will. Federal law prohibits discrimination based on disability, age, race, color, religion, sex, ethnic and national origin. In some areas local and state laws forbid discrimination on other grounds, such as sexual orientation. A business owner acting upon the sentiment ex pressed above could face legal actions, costly legal fees and penalties. In addition, the organizational culture such an own er would inspire would not be conducive to high employee morale, which has its own consequences. Views expressed by the owner would also discourage talented minorities and women from selecting this as a company to work for. Not least, renegade businesses can have bad reputations among potential clients or customers who would prefer to do business with a more ethical, law-abiding company. Consequently, a business owner with such views would find them counter-pro ductive in the long run. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking TOP: Conceptual REF: p. 105-116 OBJ: 1 LOC: Legal Responsibilities 3. Discuss in some detail two gender-based discrimination issues, other than sexual harassment. What, if any, legislation ex ists to address these issues? ANS: There are many ways of discriminating against women other than sexual harassment. For example, women may be dis criminated against in pay (Equal Pay Act (1963)), and they may be discriminated against if they become pregnant (Preg nancy Discrimination Act (1978). The Equal Pay Act requires that women and men who perform substantially the same work must be paid the same. Differences in pay may be allowed due to other factors such as seniority, performance levels, quantity/quality of work, or factors other than sex such as skill, effort, and working conditions. This allows women to be paid based on what they can do or on conditions of the job, rather than an accident of birth. The PDA requires that preg nancy be treated the same way that the company treats other medical conditions. Thus, sick leave policies and benefits, as well as disciplinary policies, must be applied to pregnant employees the same as they apply to employees who are ill. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking TOP: Conceptual REF: p. 107-109 OBJ: 3 LOC: Legal Responsibilities 4. What are the major requirements of the Americans with Disabilities Act? How has the ADA impacted both employers and individuals with disabilities? What actions should an employer take to insure compliance with the ADA? ANS: Employers with 15 or more employees are required to make reasonable accommodation for individuals with disabilities. Disabilities include physical and mental impairments that substantially limit the person in some major life activities. The term also includes people who have a record of such impairment or who are regarded as having such an impairment. It also includes some life-threatening illnesses. To conform with the ADA, employers must analyze all the jobs in the organ ization to identify essential job functions. A disabled applicant cannot be rejected merely because he/she cannot perform an essential function of the job without accommodation by the employer. Most accommodations are inexpensive. But, an employer can claim undue hardship if the accommodation needed is unreasonable in terms of difficulty or expense. The ADA also restricts the questions an employer can ask an applicant and the maintenance of confidential medical records. It prohibits physical exams until after a conditional offer of employment is made. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking TOP: Conceptual REF: p. 109-112 OBJ: 3 LOC: Legal Responsibilities 5. George applied for a job as an analyst at Troposphere, Inc. George was rejected and he feels that the decision was discrim inatory. What does George need to prove in order to have a prima facie case of discrimination? On what bases might George have been discriminated against? What would be the hardest aspects of Georges case for him to prove? ANS: First, George must prove that he is a member of a protected class. Since George is a man, he might have been discrimin ated against on the basis of race, religion, age, disability or military status. Secondly, George must show that he a) applied for the job, b) that he was qualified for the job, and c) that he was rejected. Although it would be easy for George to prove that he applied and was rejected, it will be more difficult for him to prove he was qualified, because he needs to have some evidence of the essential functions of the job. Thirdly, George needs to prove that the company continued to seek other applicants after he was rejected. This could be proved by the company continuing to advertise for this opening. PTS: 1 DIF: Moderate NAT: AACSB Analytic TOP: Application REF: p. 104 OBJ: 1 LOC: Legal Responsibilities

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Chapter 51. The two approaches that are the basis for equal employment opportunity in U.S. organizations are non-discriminatory practicesanda. diversity training.b. affirmative action.c. reasonable accommodation.d. attribute-neutral practices.2. Mo
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Chapter 1 NotesChanging Nature of Human Resource ManagementNature of Human Resource Management:Human Resource (HR) Management designing management systems to ensure that human talent isused effectively and efficiently to accomplish organizational goal
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Chapter 2 NotesStrategic HR Management and PlanningNature of Strategy and HR Management:Strategy the proposition an organization follows for how to complete successfully and thereby surviveand grow.Strategic HR Management the use of employees to gain
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Chapter 3 NotesOrganization/Individual Relations and RetentionComponents of the Psychological Contract:Employers provide:1.Competitive compensation andbenefits2.Flexibility to balance work andhome life3.Career developmentopportunitiesEmployer
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Chapter 4 NotesLegal Framework of Equal EmploymentNature of Equal Employment Opportunity:Equal Employment Opportunity (EEO) the concept that all individuals should have equal treatment inall employment-related actions.Discrimination recognizing diffe
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Chapter 5 NotesManaging Equal Employment and DiversityEqual Employment and Diversity Management:Workforce Diversity Management:1. Non-Discriminatory Practices2. Affirmative ActionRace, National Origin, and Citizenship Issues:Potential HR Issues:1.
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Exam 1 Management 367List of LawsEqual Employment Opportunity (EEO) the concept that all individuals should have equal treatmentin all employment-related actions. Discrimination Protected Class Disparate Treatment Disparate Impact Blind to Differe
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Chapter 61. Odd and unusual aspects of jobs that are unique to the employing organizationb. are important job requirements and should be included in the job description.2. Work is defined asb. effort directed toward producing or accomplishing results.
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Chapter 61. Odd and unusual aspects of jobs that are unique to the employing organizationa. should be omitted from the job descriptions because they are not comparable across com panies and industries.b. are important job requirements and should be inc
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Chapter 81. When the Wynn Las Vegas was hiring over 1,000 employees for its resort opening, the Wynn HR department selected ap plicants for formal interviews after the applicants completed an online questionnaire. This is an example of a/anc. pre-screen
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Chapter 81. When the Wynn Las Vegas was hiring over 1,000 employees for its resort opening, the Wynn HR department selected ap plicants for formal interviews after the applicants completed an online questionnaire. This is an example of a/ana. structured
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Chapter 91. _ provides employees with specific, identifiable knowledge and skills for use in their present jobs.a. Orientationb. Learningc. Employee developmentd. Training2. Development is distinguished from training, in thata. development is broad
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Chapter 101. The focus on talent management has intensified in the last few years due to all of the following factors EXCEPTa. shortages of skilled workers.b. increasing global competition for employees.c. technology enabling the automation of talent
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Chapter 71. The limitations the U.S. government places on available visas for high-skilled foreign workersb. make U.S. firms less competitive world-wide.2. Recommendations for successful recruiting include all the following processes EXCEPTb. retainin
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Chapter 91. _ provides employees with specific, identifiable knowledge and skills for use in their present jobs.d. Training2. Development is distinguished from training, in thata. development is broader in scope, focusing on individuals gaining new ca
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Chapter 101. The focus on talent management has intensified in the last few years due to all of the following factors EXCEPTd. the obsolescence of baby boomers skills.2. _ is concerned with the attraction, development and retention of human resources.
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Chapter 111. Although Jack Welchs technique of differentiation in performance appraisal has been criticized by some as beingmean spirited and encouraging of politics, it has the advantage ofc. communicating to employees their exact standing.2. Perform
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Chapter 121. McDonalds global rewards program has resulted in lower managerial and employee turnover. In this type of total rewardssystem why would turnover decline?d. Higher performers receive higher incentives than lower performers, so high per forme
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Chapter 131. Susan, the president of the school board for a rural school district, is interested in implementing a pay-for-performancecompensation system in the school. The school board has called you in as an expert in incentive compensation to explore
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Chapter 141. Rapid increases in the costs of health benefits are having all of the following effects EXCEPTc. causing many employers to establish on-site health clinics in lieu of health insurance.2. Employee benefits are a type ofd. indirect reward.
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Chapter 161. As Director of HR for a utility which operates three nuclear plants, you have been approached by the CEO regarding im planting Radio Frequency Identification chips into employees who have access to critical areas of the plants. With terror i
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Chapter 171. Estimated union membership in the U.S. is roughly _ of the private sector workforce.a. under 10%2. The newly-formed Change to Win Federation is targeting all of the following for unionization attempts EXCEPTc. public sector workers.3. A
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INSTRUCTORSMANUALto accompanyFREDERIC S. MISHKINEast Carolina UniversitySTANLEY G. EAKINSUSTco hisin py wostr rig ruc h k ito t la s prs w r u s otse an ecton d edly. is f byorEast Carolina UniversityExecutive Editor: Donna BattistaEd
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ContentsPreface .vAlternative Course Outlines.viiAncillary Items for Financial Markets and Institutions, Fifth Edition.xiSolutions to Integrative Cases.xvSolutions to Online Mini-Cases.xxiPart IIntroduction.Chapter 1 Why Study Financial Marke
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Solutions to Integrative Cases Part IMini-Case Solution1.Based on monthly data, from January 1960 to December 1999: Calculate the inflation rate as t = 1200 (Pt + 1/Pt 1) and graph the series. The average t for each decade is (approximately): 2.5, 6.
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Solutions to Online Mini-CasesThe complete set of mini-cases and solutions can be found on the texts companion websiteat http:/www.prenhall.com/mishkin_eakins. Chapter 3 Mini-Case1. $40.002. $840.003. $55.774. a. 10.75%b. 11.63%5. a. 12.25%b. 12
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Chapter 2Overview of the Financial SystemFunction of Financial MarketsStructure of Financial MarketsDebt and Equity MarketsPrimary and Secondary MarketsExchanges and Over-the-Counter MarketsMoney and Capital MarketsInternationalization of Financia
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Part IIFundamentals of Financial MarketsChapter 3What Do Interest Rates Mean andWhat is Their Role in Valuation?Measuring Interest RatesPresent ValueFour types of Credit Market InstrumentsYield to MaturityGlobal Box: Negative T-Bill Rates? Japan
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Chapter 4Why Do Interest Rates Change?Determinants of Asset DemandWealthExpected ReturnsRiskLiquiditySummarySupply and Demand in the Bond MarketDemand CurveSupply CurveMarket EquilibriumSupply and Demand AnalysisChanges in Equilibrium Interes
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Chapter 5How Do Risk and Term StructureAffect Interest Rates?Risk Structure of Interest RatesDefault RiskCase: The Enron Bankruptcy and the Baa-Aaa SpreadLiquidityIncome Tax ConsiderationsSummaryCase: Effects of the Bush Tax Cut on Bond Interest
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Chapter 6Are Financial Markets Efficient?The Efficient Market HypothesisRationale Behind the HypothesisStronger Version of Efficient Markets TheoryEvidence on the Efficient Market HypothesisEvidence in Favor of Market EfficiencyMini-Case Box: An Ex
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Part IIICentral Banking and the Conductof Monetary PolicyChapter 7Structure of Central Banksand the Federal Reserve SystemOrigins of the Federal Reserve SystemInside the Fed Box: The Political Genius of the Founders of the Federal Reserve SystemSt
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Chapter 8Conduct of Monetary Policy:Tools, Goals, Strategy and TacticsThe Federal Reserves Balance SheetLiabilitiesAssetsOpen Market OperationsDiscount LendingThe Market for Reserves and the Federal Funds RateSupply and Demand in the Market for R
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Part IVFinancial MarketsChapter 9The Money MarketsThe Money Markets DefinedWhy Do We Need Money Markets?Cost AdvantagesThe Purpose of the Money MarketsWho Participates in the Money Markets?U.S. Treasury DepartmentFederal Reserve SystemCommercia
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Chapter 10The Bond MarketPurpose of the Capital MarketCapital Market ParticipantsCapital Market TradingOrganized Securities ExchangesOver-the-Counter MarketsTypes of BondsTreasury Notes and BondsTreasury Bond Interest RatesTreasury Inflation Pro
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Chapter 11The Stock MarketInvesting in StocksCommon Stock Versus Preferred StockHow Stocks are SoldComputing the Price of a Common StockMini-Case: NASDAQ: Fighting for its Life Against ECNsThe One-Period ValuationThe Generalized Dividend ModelThe
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Chapter 12The Mortgage MarketsWhat are Mortgages?Characteristics of the Residential MortgageMortgage Interest RatesApplication: The Discount Point DecisionLoan TermsMortgage Loan AmortizationApplication: Computing the Payment on Mortgage LoansTyp
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Chapter 13The Foreign Exchange MarketForeign Exchange MarketWhat are Foreign Exchange Rates?Following the Financial News: Foreign Exchange RatesWhy are Exchange Rates Important?How is Foreign Exchange Traded?Exchange Rates in the Long RunLaw of On
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Chapter 14The International Financial SystemIntervention in the Foreign Exchange MarketForeign Exchange Intervention and the Money SupplyInside the Fed Box: A Day at the Federal Reserve Bank of New Yorks Foreign Exchange DeskUnsterilized Interventio
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Part VFundamentals of Financial InstitutionsChapter 15Why Do Financial Institutions Exist?Basic Facts About Financial Structure Throughout the WorldTransaction CostsHow Transaction Costs Influence Financial StructureHow Financial Intermediaries Red
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Chapter 16What Should Be Done About Conflicts of Interest?A Central Issue in Business EthicsWhat Are Conflicts of Interest and Why Are They Important?Why Do We Care About Conflicts of Interest?Ethics and Conflicts of InterestTypes of Conflicts of In
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Part VIThe Financial Institutions IndustryChapter 17Banking and the Managementof Financial InstitutionsThe Bank Balance SheetLiabilitiesAssetsBasic BankingGeneral Principles of Bank ManagementLiquidity Management and the Role of ReservesAsset M
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Chapter 18Commercial Banking Industry:Structure and CompetitionHistorical Development of the Banking SystemMultiple Regulatory AgenciesFinancial Innovation and the Evolution of the Banking IndustryResponses to Changes in Demand ConditionsResponses
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Chapter 19Savings Associations and Credit UnionsMutual Savings BanksSavings and Loan AssociationsMutual Savings Banks and Savings and Loans ComparedSavings and Loans in Trouble: The Thrift CrisisLater Stages of the Crisis: Regulatory ForbearanceCom
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Chapter 20Banking RegulationAsymmetric Information and Bank RegulationGovernment Safety Net: Deposit Insurance and the FDICGlobal Box: The Spread of Government Insurance Throughout the World: Is This a Good Thing?Restrictions on Asset Holdings and Ba
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Chapter 21The Mutual Fund IndustryThe Growth of Mutual FundsThe First Mutual FundsBenefits of Mutual FundsOwnership of Mutual FundsMutual Fund StructureOpen-versus Closed-end Mutual FundsOrganizational StructureCase: Calculating a Mutual Funds Ne
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Chapter 22Insurance Companies and Pension FundsInsurance CompaniesFundamentals of InsuranceAdverse Selection and Moral Hazard in InsuranceSelling InsuranceGrowth and Organization of Insurance CompaniesTypes of InsuranceMini Case: Insurance Agent:
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Chapter 23Investment Banks, Security Brokers and Dealers,and Venture Capital FirmsInvestment BanksBackgroundUnderwriting Stocks and Bonds Following the Financial News: New Securities IssuesEquity SalesMergers and AcquisitionsSecurities Brokers an
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Part VIIThe Management of Financial InstitutionsChapter 24Risk Management in Financial InstitutionsManaging Credit RiskScreening and MonitoringLong-Term Customer RelationshipsLoan CommitmentsCollateralCompensating BalancesCredit RationingManagi
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Chapter 25Hedging with Financial DerivativesHedgingForward MarketsInterest-Rate Forward ContractsThe Practicing Manager: Hedging Interest-Rate Risk with Forward ContractsPros and Cons of Forward ContractsFinancial Futures MarketsFinancial Futures
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Chapter 26On the Web: Finance CompaniesHistory of Finance CompaniesPurpose of Finance CompaniesRisk in Finance CompaniesTypes of Finance CompaniesBusiness (Commercial) Finance CompaniesConsumer Finance CompaniesSales Finance CompaniesBox 1: The E
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Chapter 1Why Study Money, Banking, and Financial Markets?TMultiple Choice1)Financial markets and institutions(a) involve the movement of huge flows of money.(b) affect the profits of businesses.(c) affect the types of goods and services produced i
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Chapter 2An Overview of the Financial SystemTMultiple Choice1)Every financial market has the following characteristic:(a) It determines the level of interest rates.(b) It allows common stock to be traded.(c) It allows loans to be made.(d) It chan
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Chapter 3What Is Money?TMultiple Choice1)There is no single precise measure of money or the money supply for economists because(a) the government considers money supply statistics to be confidential and refuses to publish them.(b) deciding what is
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Chapter 4Understanding Interest RatesTMultiple Choice1)Of the following measures of interest rates, which is considered by economists to be the mostaccurate?(a) The yield to maturity(b) The coupon rate(c) The current yield(d) The yield on a disc
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Chapter 5The Behavior of Interest RatesTMultiple Choice1)If wealth increases, the demand for stocks _ and that of long-term bonds _.(a) increases; increases(b) increases; decreases(c) decreases; decreases(d) decreases; increasesAnswer: AQuestio
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Chapter 6The Risk and Term Structure of Interest RatesTMultiple Choice1)The risk structure of interest rates is(a) the structure of how interest rates move over time.(b) the relationship among interest rates of different bonds with the same maturit
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Chapter 7The Stock Market, the Theory of Rational Expectations,and the Efficient Markets HypothesisTMultiple Choice1)Stockholders rights include(a) the right to vote.(b) the right to manage.(c) primary claims on all cash flows.(d) ownership of b
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Chapter 9The Banking Firm and the Management of FinancialInstitutionsTMultiple Choice1)A banks balance sheet(a) shows that total assets equals total liabilities plus equity capital.(b) lists sources and uses of bank funds.(c) indicates whether or
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Chapter 10Banking Industry: Structure and CompetitionTMultiple Choice1)The modern commercial banking system began in America when the(a) Bank of United States was chartered in New York in 1801.(b) Bank of North America was chartered in Philadelphia
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Chapter 11Economic Analysis of Banking RegulationTMultiple Choice1)Although the FDIC was created to prevent bank failures, its existence encourages banks to(a) take too much risk.(b) hold too much capital.(c) open too many branches.(d) buy too mu