Mngt 367 Ch 16 MC answer only
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Mngt 367 Ch 16 MC answer only

Course Number: MNGT 367, Summer 2011

College/University: Nicholls State

Word Count: 4851

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Chapter 16 1. 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 ism and sabotage being increasingly worrisome, the CEO thinks that this might significantly improve security in the plants. He asks your opinion. You respond that...

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16 1. Chapter 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 ism and sabotage being increasingly worrisome, the CEO thinks that this might significantly improve security in the plants. He asks your opinion. You respond that b. employee privacy and civil liberties issues are a major concern. 2. ____ belong to a person by law, nature, or tradition. d. Rights 3. In the reciprocal relationship, each right of employers and employees comes with a corresponding a. responsibility. 4. Carlos works for a large floral company. He is expected to complete 30 flower arrangements per day according to the spe cifications of each customer order. Each arrangement must contain the correct number, kinds, colors, and qualities of flowers in the required arrangement style. Customer complaints about arrangements directly affect Carlos performance appraisal. Carlos has been angry for several months. I do my best to meet the order specifications, but the company is cutting corners on the flowers. What we receive is half-wilted, too small, or the wrong mix of varieties. What is happen ing here? b. The floral company is not meeting its responsibilities to Carlos. 5. If an employee has the right to a safe working environment, the employer has b. an obligation to provide a safe workplace. 6. An employees entitlement to a minimum wage is guaranteed by federal law. Consequently, it is a a. statutory right of the employee. 7. Which of the following would NOT typically be included in an employment contract? c. the parties statutory rights 8. Sherlock is a private investigator. He and Megatherium Industries have a formal agreement that he will perform back ground checks on all applicants for managerial-level positions for one year, for a certain fee and within certain perform ance guidelines. This agreement gives Sherlock c. contractual rights. 9. Traditionally, formal employment contracts were negotiated mainly for a. executives and senior managers. 10. A financial research firm, is concerned that scientific or technical employees may take company secrets with them when they quit or are terminated. The firm should include a/an ____ clause in its employment contracts. d. intellectual property 11. Provisions stating that if the individual employee leaves the organization, existing customers and clients cannot be soli cited for business for a specific period of time, are contained in a/an a. non-piracy agreement. 12. Clark Kent has been hired by an HR consulting firm as an outplacement counselor. Clark will be trained in the companys copyrighted techniques and programs. As part of his employment contract, Clark must agree that if he quits or is termin ated he will not work as a trainer for a rival outplacement company in a specified list of states for a period of one year. This is an example of a ____ clause. b. non-compete 13. Matt is a line supervisor at a plant that makes latex paint. After observing the production process closely, Matt designed a new type of mixer for the paint which cuts production time by one-third which will save the company $560,000 in the next year. Matt received a congratulations letter from the CEO and a coupon for a free dinner for two at a family steak house. Matt is insulted at this meager reward and wants to take his invention and start a business of his own. Which of the following statements is TRUE? a. The company owns the copyright to Matts invention, so it is not Matts property to use. 14. In order to be enforced in court, the rights of an employee d. can be either in written form or exist only as implied promises. 15. When Claudette was hired, her supervisor said that she had a job with the company as long as she performed well. Which of the following statements is true? c. Claudette has an implied contract. 16. Jolene is aware that one of her colleagues, Bill, is biased against Asians. Bill is a supervisor at the same level as Jolene. He has told Jolene that he has refused to hire several qualified candidates referred to him by the HR recruiter. Im just going to wait-out HR until HR finally sends me someone who is not a (racial epithet). Jolene doesnt think it is her place to take any action, although she disapproves of Bills behavior. Which of the following statements is FALSE? d. The employer would incur all liability for discrimination in this case. 17. A statement in the employee handbook that the employee or the employer may terminate the relationship at any time, for any reason, with or without cause or notice is called a/an ____ statement. c. employment-at-will 18. Employment practices liability insurance c. requires an audit of the companys HR polices and practices. 19. Grace is an hourly bakery employee for an independently-owned doughnut shop. She has worked for the owner for two years, and she has consistently received good performance appraisals and raises. She is well-liked by the owner and her co-workers. Yesterday, the owner called Grace in and said, Im so sorry, Grace. My nephew, Ace, has been released from the federal penitentiary and no one will hire him. My sister is at her wits end, and she has asked me to find him a job. Im giving Ace your job. Here are two weeks wages in lieu of notice. Good luck. Ill be happy to write a good refer ence for you. Which of the following statements is TRUE? b. Grace is an at-will employee and she has no case against her former employer. 20. Employment-at-will is a common-law doctrine holding that d. an employer has the right to hire, fire, demote, or promote whomever it chooses ex cept as limited by law or contract. 21. Emily was selected for jury duty for a terrorism trial. The jury was sequestered for three months, resulting in Emilys be ing unable to work for that entire time. Her employer fired her. Emily c. can sue because her firing was a violation of public policy. 22. How have the courts treated unionized workers and employment-at-will actions? a. Unionized workers cannot pursue EAW actions as at-will employees, because they are covered by the grievance-arbitration process. 23. In the landmark EAW case, Fortune v. National Cash Register Company, Mr. Fortune was fired shortly after winning a large order which would have earned him a big commission. The courts ruled that c. by firing him, NCR violated the covenant of good faith and fair dealing. 24. Wallace is widely disliked by his co-workers, although he has a good performance record and has never had any disciplin ary actions taken against him. The problems with Wallace center mainly around his lack of personal hygiene and unre fined manners. Wallaces supervisor has changed Wallaces job duties to include work he considers demeaning She has required him to work overtime when his co-workers have not had to do so. She has also begun reprimanding him in front of co-workers for behaviors that had previously not been mentioned. She has posted work samples on the office bulletin board under the heading The Good, The Bad, and The Ugly with Wallaces photo posted under Ugly. Wallace could have a case for c. constructive discharge. 25. If an employee is terminated for reasons that are illegal or improper, this is termed a. wrongful discharge. 26. An employer can avoid a case of wrongful discharge by following all of the following steps EXCEPT c. writing a clause in the employee handbook that all employees are at-will employees. 27. Which of the following categories of employee are typically protected from firing except for just cause? a. unionized employees 28. The concept of just cause for disciplinary actions or dismissal is concerned with d. fairness. 29. Which of the following would be a criterion for determination of just cause for disciplinary action? a. Was the employee warned of the consequences of the conduct? 30. Amber, a sales associate in a department store, was terminated for theft. Amber says she is innocent. She argues that be cause she was not allowed to explain the situation and defend herself that b. due process was not followed. 31. People evaluate the favorability of their outcomes by comparing them with the outcomes of others, given their relative situations. This decision involves the concept of d. distributive justice. 32. Procedural justice deals with which of the following questions? a. Was the decision-making process fair? 33. For unionized employees, due process usually refers to c. the right to use the grievance procedure specified in the union contract. 34. Henry was expecting to be promoted to shift supervisor, but George was promoted instead. Henry felt that although he and George both had outstanding performance appraisals, he should have gotten the promotion because he was hired two years before George. Seniority should be the deciding factor in promotion decisions in Henrys point of view, and he doesnt understand why a less-senior employee should be promoted ahead of him. Henrys sense of unfairness about the promotion can be defined as c. procedural injustice. 35. Chelsey is a supervisor. She tells all her subordinates that they can come speak with her any time about any problem they may have. Chelsey d. has an open-door policy. 36. You have been hired to be the first director of HR for Downtown Foods, Inc. You are trying to persuade the president of the company to institute a formal complaint procedure. The CEO argues that if there is a complaint procedure it will just encourage employees to make numerous and unsubstantiated complaints and that morale will decline because most of the complaints will be rejected by management. Your most persuasive argument with the CEO will probably be that com plaint mechanisms which are viewed by employees as fair and available for use, b. will make lawsuits by disgruntled employees less likely. 37. In order to defend itself against accusations of wrongful discharge, employers should take all the following actions EX CEPT b. encourage the employee to resign before he/she is terminated. 38. Pet Products International uses an outside neutral third party to make decisions in situations where there are disputes between employees and management. Pet Products requires its employees to sign a pre-employment agreement stating that all disputes will be submitted to this neutral third party. Pet Products is using d. compulsory arbitration. 39. Alternative dispute resolution procedures include all of the following EXCEPT a. due process. 40. A concern with compulsory arbitration is that it may be unfair because c. employers often select the arbitrators rather than the employees. 41. An individual who is outside the normal chain of command who acts as a problem solver for management and employees is known as a/an a. organizational ombuds. 42. Peer review panels d. can reduce the likelihood of employee lawsuits. 43. What benefits do alternative dispute resolution systems provide employers? c. lower legal costs 44. In a case of discrimination in promotion on the basis of age brought by a 60-year-old Asian woman, it would be best if the peer review panel includes which of the following employees as a panel member? b. a 59-year-old Hispanic man 45. You are the director of HR at a small telemarketing company. One of your long-time employees, Arabella, has become a practitioner of white magic. She has begun offering to give co-workers love potions, good luck talismans, or other magical cures for their personal problems. Arabella is not selling these cures, but giving them away for free. All of Ara bellas activities occur during her and her co-workers lunch hours. Most of her co-workers find this a little eccentric, but not offensive. Other co-workers are upset because there is a witch in their workplace. You should c. make sure any investigation or discipline of Arabella follows company policies and due process. 46. Which of the following statements is TRUE? b. Employers can require employees to sign a non-disclosure privacy agreement that limits what they can say in their blogs. 47. David is an engineer who considers himself a humorist and a modern-day Mark Twain. As a hobby, he collects humor ous e-mails from friends throughout the world using his computer at work. Much of this collection is composed of jokes regarding the president, religious leaders, and blondes. So far, no one at his workplace has complained about Davids hobby, and co-workers frequently pop into Davids cubicle during their breaks to ask him for the best joke of the day. d. Davids hobby is a potential legal liability for the company. 48. Austin has just taken a job with Zeta Warehouses, having previously worked for 6 years for the state Transportation Ad ministration. Austin will find that a. he will have less access to his personnel files now that he works in the private sector. 49. Which of the following statements is TRUE regarding whistle-blowing? a. Courts have protected whistle-blowers from retaliation by their employers. 50. Kenneth works for a pharmaceutical company that is getting positive publicity by selling antibiotics at low cost to African nations. Kenneth has learned that these drugs are past their expiration dates and that the company has repackaged them. Kenneth has great respect for Anderson Cooper at CNN and he has contacted Cooper about this wrongdoing. Which of the following statements is true? d. Kenneth would be more likely to be protected from retaliation if he had reported the wrongdoing to his member of Congress. 51. In general, personnel files and records should be maintained for b. 3 years. 52. Which pieces of information SHOULD be filed in an employees confidential file b. the supervisors evaluation of the employees promotability completed 12 months ago 53. Which of the following is RECOMMENDED regarding employee records? b. Release employee information only with employee's consent. 54. Mary is head of accounting for a large suburban church with over 5,000 members. While Mary is on vacation in Israel, the chair of the Board of Elders decides to search Marys desk, her filing cabinet, her computer files, and her voice mail. This takes him three days and he finds nothing of concern. Which of the following statements is TRUE? b. The church elder needed to have a belief that Mary had violated work rules in order to conduct this search. 55. You are HR director of a rural, Southwestern bank with three branches. One of the tellers, Stacy, has a weekend career in which she performs at rodeos doing daring feats of horsemanship wearing scanty outfits. She has become well-known in the area, and clients will come into the bank and wave hi to Racy Stacy. Stacy always dresses and behaves profession ally at work, but you are concerned that her sideline is demeaning to the banks image. b. Stacys rodeo act is an off-work, legal activity, and it is not clear that you can discip line her. 56. The Federal constitutional right to protection from unreasonable search and seizure a. protects an only individual against searches and seizure by agents of the government. 57. The USA Patriot Act c. allows the government to monitor individuals in the workplace in order to protect national security. 58. As director of HR for a regional trucking firm, your CEO has asked you what steps need to be taken in order to place Global Positioning Devices in all the trucks in order to make sure that the truck drivers take approved routes on Interstate highways and do not take shortcuts on substandard roads or otherwise deviate from their routes. The CEO also wishes to install mileage and time recorders on the trucks to ensure that drivers are taking mandatory rest breaks. Your advice to the CEO includes all EXCEPT the following d. maintain secrecy about the exact methods of monitoring from the truck drivers, oth erwise they might be able to sabotage the tracking devices. 59. In casinos, video cameras are positioned so that employees interactions with customers are constantly recorded. For this practice to conform to proper HR procedures, it should involve all of the following EXCEPT c. the local police must be notified of the surveillance. 60. Many complaints have reached the director of HR regarding employees using the company computers for personal e-mail and web-surfing. The problem even extends to managers and professional staff accessing the web for personal use. Since the managers often work 10 to 12 hours a day, and eat lunch at their desks, they have little time away from work to handle personal business. The HR director should b. develop a policy to track personal use of computers and have the employees sign off on it. 61. Which of the following employer actions would most likely be a violation of employee privacy? c. monitoring video cameras in the employee changing room. 62. Which of the following is NOT a recommended part of an e-mail and voice mail policy? b. The employer may search e-mail or voice mail upon 24 hours notice to the employee. 63. The CEO of the firm suspects that one of the researchers has been selling company secrets to a competitor. The CEO bases this suspicion on the fact that in the last year, this researcher who has previously lived a modest lifestyle has pur chased a BMW convertible, significantly improved her wardrobe, and has gotten her nose fixed. The CEO has asked you to arrange for a Polygraph Exam. Reluctantly, you have brought in a polygraph expert. The researcher refuses to take the exam. c. The researcher cannot be fired for refusing to take the polygraph. 64. The best practice is to use background checks when a. screening applicants. 65. The Polygraph Protection Act b. requires employees to be advised of their rights before taking a polygraph test. 66. The Fair and Accurate Credit Transaction Act (FACT) a. allows employers to hire outside investigators without notifying the employee under investigation. 67. As director of HR you are presenting the CEO with a proposal for an intense anti-drug and substance abuse program in your organization. This program will be fairly expensive, and you plan to stress the cost-savings from decreased substance abuse in the firm. Your arguments will include all of the following EXCEPT b. turnover will decrease. 68. The Drug-Free Workplace Act of 1988 b. requires government contractors to take steps to eliminate employee drug usage. 69. For U.S. government contractors, what is the major consequence of not providing employees with a drug free environ ment? d. The company may lose its government contracts. 70. Paul is a recreational user of soft, illegal drugs and does not intend to stop using them. He is graduating from college and considering his career choices. He has learned that the U.S. Department of Transportation requires regular drug testing for certain occupations. All of the following occupations EXCEPT ____ would subject Paul to DOT drug testing. c. warehouse forklift operator 71. There are three major drug testing policies that most employers follow when testing current employees. Which of the fol lowing is NOT one of these typical policies? c. testing before expensive, complicated equipment is installed 72. Pauls supervisor went to a party last weekend where she saw Paul smoking marijuana. She wants to fire Paul, and she comes to you, the HR director, for advice. You advise her c. that she must document whether Pauls performance on the job has declined below acceptable levels before she can refer him for drug-testing. 73. Where there is a choice among actions, ____ act as general guidelines that focus organizational actions. b. policies 74. ____ are general in nature, while ____ are specific to the situation. d. Policies, rules 75. ____ are customary methods of handling activities. a. Procedures 76. The major problem with negotiating special employment contracts with highly-valued employees is c. the negative reaction of other employees when they learn of other employees special treatment. 77. When a major business relocated from Houston, Texas, to Bismark, North Dakota, in order to escape the annual disruption of hurricane season and to take advantage of favorable business taxes, one of the companys key specialists refused to move. She said her children were enrolled in Houston schools, her husband had a new business that was just beginning to thrive, and that she would not disrupt her family. This employee is essentially irreplaceable. a. This would be a good time to discuss an idiosyncratic employment arrangement. 78. Each hospital employee must maintain a land-line telephone connection at home so that hospital administrators may be more likely to contact him/her in case of emergency. This is an example of a c. rule. 79. Typically, HR managers d. train managers to administer policies, rules, and procedures. 80. Which of the following statements is TRUE about employee handbooks? b. The proper use of disclaimers in employee handbooks can preserve the employers right to discharge employees with or without cause. 81. Discipline is most constructively viewed as ____ that enforces organizational rules. d. a form of training 82. The disciplinary system can be viewed as an application of ____ problem or unproductive employees. a. behavior modification to 83. The best discipline is c. self discipline. 84. The recent Data Protection Act requires employers to c. keep personnel records up to date and keep only necessary details on file. 85. The ____ approach builds on the philosophy that violations are actions that usually can be constructively corrected without penalty. b. positive discipline 86. What should be the goal of counseling as a part of the discipline process? d. to heighten employee awareness of organizational policies and rules 87. Because of persistent problems with tardiness, Konrad has been through counseling and written documentation. Now he has been given a decision day-off to develop an action plan to solve his tardiness behavior. Konrads employer uses a ____ discipline approach. b. positive 88. The greatest difficulty with positive discipline is that c. managers have to be trained to be effective counselors. 89. ____ incorporates a sequence of steps, each becoming more stringent, that are designed to change the employee's inappro priate behavior. a. Progressive discipline 90. Sally was found intoxicated from illegal drug use at work, although she took the drugs on her off-time. She was immedi ately terminated. The company has a progressive discipline process. Sallys firing c. was appropriate. The progressive discipline procedure is not applied for certain seri ous offenses. 91. Managers may be reluctant to use discipline. Which of the following is NOT a reason for this reluctance? d. fear that discipline can harm performance 92. For discipline to be effective it must be a. aimed at the behavior, not at the employee personally. 93. The goal of discipline is to a. improve performance. 94. The final stage both the progressive and the positive processes is c. termination. 95. Leyla has received high performance appraisals for the three years she has worked for a medium-sized insurance firm in the rural Midwest. Leylas job involves telephone support for customers who have questions. When Leyla returned from her vacation, she had gotten three facial piercings. Leylas supervisor informed Leyla that he did not feel this was appro priate for the workplace. Leyla replied that it was no different than some of the other workers who wore two and three earrings in each ear. The company has no appearance policy. Leylas supervisor is asking you, the HR manager for the firm what he can do. You tell the supervisor b. Leylas job requires her to speak clearly on the phone. If her piercings cause her speech to be poorly understood, the supervisor could require Leyla to remove those piercings that interfere with her speech. 96. It is common practice for terminated employees to be removed from the workplace as soon as possible either without re turning to their work station or by quickly clearing out their work station under the supervision of security personnel. This policy is intended to a. prevent violence or sabotage by the terminated employee. 97. When terminating an employee c. regardless of the employees apologies for past failings and promises to improve, the termination must proceed. 98. An agreement in which an employee who is being terminated agrees not to sue the employer in exchange for specific be nefits is called a/an b. separation agreement. 99. Claudette is being terminated from her position as Chief Financial Officer of a private university. She has signed a separ ation agreement not to sue the employer. This agreement is legal if b. Claudette receives additional consideration for signing the agreement. ESSAY 1. What is a formal employment contract? Discuss the provisions typically included in a formal employment contract. Register to View Answerformal employment contract outlines the details of an employment agreement. The typical contract identifies the parties to the contract and the general nature of the employees job duties. Typical provisions include terms and conditions of em ployment, general job duties and expectations, compensation and benefits, and confidentiality and secrecy. The contract will specify whether the employment relationship is for an indefinite period of time or will be automatically renewed after a certain period of time. The contract will cover issues arising when the person leaves the employer, such as severance agreements, continuation of benefits, non-piracy and non-compete agreements, non-solicitation of current employees upon departure, and intellectual property concerns. 2. Explain the doctrine of employment-at-will and its exceptions. What is the relationship between this doctrine and the em ployment agreement? ANS: EAW is a common law doctrine stating that employers have the right to hire, fire, demote, or promote whomever they choose, unless there is a law or contract to the contrary. EAW defends the employees right to quit one employer and go to another job. There are three exceptions to EAW. An employer cannot fire an employee if it violates public policy, if it vi olates an implied contract, or if it violates good faith and fair dealing. An employment contract/agreement over-rides EAW, in that the terms of the contract apply to the employment relationship, and the employee and employer must follow the contract regarding termination, quitting, and such. 3. Explain the growth in alternative means for resolving disputes. Describe three methods of alternative dispute resolution. Register to View Answermajor reason for the growth of alternative dispute resolution is dissatisfaction with the expense and delays common in the court system. Methods include arbitration, peer review panels, and ombuds. Arbitration uses a neutral third party to make a decision. This is typical in union contracts, but must be specially established in non-union workplaces. Peer re view panels allow employees to appeal disciplinary actions to a internal committee of employees. These panels can either make decisions or recommendations about the disciplinary action. An organizational ombuds is an employee outside of the normal chain of command who acts as a problem solver for both management and non-management employees. Om buds operate with confidentiality and (usually) informality when the situation does not involve unusual or significant il legal actions. 4. What are the consequences of substance abuse in the workplace? When can the employer legally test for drug use? ANS: Substance abuse can have significant financial consequences for organizations. Substance abuse increases absenteeism, accidents, damage, health care needs, and incidents of theft and fraud. In certain workplaces, intoxicated employees can put their own or others health or lives in danger. This is especially true in those occupations covered under the Depart ment of Transportation Act, such as mass-transit, airlines, pipelines, trucking, and railroads. Employers can legally test for drug use before hiring, at random intervals, when there is probable cause, and after accidents. If testing is done for prob able cause, it must be based on performance related information such as absenteeism or productivity, not just the sub stance usage itself. In addition, it is most appropriate to use accurate tests, to obtain the written consent of the employee, and to treat the information confidentially. Moreover, drug testing is more appropriate if the employer has an EAP in place. Firms regulated by the DOT must test employees regularly. Government contractors are covered by the Drug Free Workplace Act and must take steps to eliminate employee drug use. 5. Describe the similarities and differences of the progressive discipline procedure and the positive discipline procedure. ANS: Each process involves steps ranging from warnings to termination. Following each step in the procedure ensures due pro cess for the employee. The manager carries out both processes. The progressive discipline approach is based on an admin istrative approach. Each step is more stringent and severe. They range from verbal and written reprimands, suspension, to dismissal. Certain serious offenses such as violence can lead to immediate dismissal without earlier steps being followed. Although positive discipline appears similar to progressive discipline, positive discipline is based on the philosophy that violations can usually be constructively corrected without penalizing the employee. In this approach, managers focus on fact-finding and guidance to encourage desirable behaviors, rather than using penalties to discourage undesirable behavi ors (which is the focus of progressive discipline). Typical steps in positive discipline are: counseling, written documenta tion, final warning with possibly a decision day off, and discharge. The advantage of the positive approach is that it focuses on problem solving. The disadvantage is the amount of manageri al time the process takes and the extensive manager training it requires.

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Nicholls State - MNGT - 367
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
Nicholls State - ECON - 317
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
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Chapter 12Nonbank FinanceTMultiple Choice1)The federal regulatory agency responsible for regulating the activities of life insurance companies is(a) the FDIC.(b) the Fed.(c) the FHLBS.(d) none of the above; there is no such federal regulatory age
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Chapter 13Financial DerivativesTMultiple Choice1)The payoffs for financial derivatives are linked to(a) securities that will be issued in the future.(b) the volatility of interest rates.(c) previously issued securities.(d) government regulations
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Chapter 14Structure of Central Banks and the Federal Reserve SystemTMultiple Choice1)Americans fear of centralized power and their distrust of moneyed interests explains why the U.S.did not have a central bank until the(a) 17th century.(b) 18th ce
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Chapter 15Multiple Deposit Creation and the Money Supply ProcessTMultiple Choice1)The government agency that oversees the banking system and is responsible for the conduct ofmonetary policy in the United States is(a) the Federal Reserve System.(b)
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Chapter 16Determinants of the Money SupplyTMultiple Choice1)Money supply models tend to focus on the monetary base rather than on reserves since(a) Fed actions have no effect on reserves but have a predictable effect on the monetary base.(b) Fed ac
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Chapter 17Tools of Monetary PolicyTMultiple Choice1)The Fed uses three policy tools to manipulate the money supply: _, which affect reserves andthe monetary base; changes in _, which affect reserves and the monetary base by influencingthe quantity
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Chapter 18Conduct of Monetary Policy: Goals and TargetsTMultiple Choice1)The objectives of the Federal Reserve in its conduct of monetary policy include(a) economic growth.(b) price stability.(c) high employment.(d) all of the above.Answer: DQu
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Chapter 19The Foreign Exchange MarketTMultiple Choice1)The exchange rate is(a) the price of one currency relative to gold.(b) the value of a currency relative to inflation.(c) the change in the value of money over time.(d) the price of one curren
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Chapter 20The International Financial SystemTMultiple Choice1)A central bank _ of domestic currency and corresponding _ of foreign assets in the foreignexchange market leads to an equal decline in its international reserves and the monetary base.(a
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Chapter 21Monetary Policy Strategy: The International ExperienceTMultiple Choice1)Overly expansionary monetary policy(a) leads to high inflation.(b) decreases the efficiency of the economy.(c) hampers economic growth.(d) does all of the above.(e
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Chapter 22The Demand for MoneyTMultiple Choice1)The quantity theory of money is a theory of(a) how the money supply is determined.(b) how interest rates are determined.(c) how the nominal value of aggregate income is determined.(d) all of the abo
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 1 1Why Study Financial Markets and Institutions 1.1 ?Mul tiple Cho ice1) Financial markets and institutions A) involve the B) movement of huge quantities of money. affect the C) pro
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 2 1Overview of the Financial System 2.1 Mul tiple Cho ice1) Every financial market performs the following function: A) It determines B) the level of interest rates. It allows C) com
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 3 1What Do Interest Rates Mean and What Is Their Role in Valuation? 3.1 Mul tiple Cho ice1) A loan that requires the borrower to make the same payment every period until the maturity da
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 4 1Why Do Interest Rates Change? 4.1 Mul tiple Cho ice1) As the bond _ and the expected return _, bonds become more attractive to investors and the price of a quantity demanded rises. A)
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 5 1How Do Risk and Term Structure Affect Interest 5.1 R a t e s ?Mul tiple Cho ice1) The term structure of interest rates is A) the relationship among interest rates of different bonds
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 6 1Are Financial Markets Efficient? 6.1 Mul tiple Cho ice1) How expectations are formed is important because expectations influence A) the demand for assets. B) bond prices. C) the r
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 7 1Structure of Central Banks and the Federal Reserve System 7.1 Mul tiple Cho ice1) American centralized power and their distrust of moneyed interests explains why the U.S. did not have
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 8 1Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics 8.1 Mul tiple Cho ice1) Assets on the Fed's balance sheet include A) government B) securities and currency in circula
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 9 1The Money Markets 9.1 Mul tiple Cho ice1) Activity in money markets increased significantly in the late 1970s and early 1980s because of A) rising shortB) term interest rates. regu
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Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 10 1The Bond Market 10.1 Multi ple Choi ce1) Compared to money market securities, capital market securities have A) more liquidity. B) longer C) maturities. lower yields. D) less ri