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DSST Things to know_Intro to Business

38 the correct answer is d common stock does not

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38. The correct answer is (D). Common stock does not receive fixed dividends like preferred stock. 39. The correct answer is (A). If ROE is high, then the firm is probably getting funds through debt. Financial leverage is a measure of debts to assets. 40. The correct answer is (C). 17,000(.98) 5 16,660 41. The correct answer is (A). Retained earnings 5 undistributed profits Dividends 5 distributed profits Profits 2 dividends 5 retained earnings 42. The correct answer is (D). Mutual funds can be classified as low risk and low yield. 43. The correct answer is (A). In a limit order, the broker is requested to buy or sell at a price equal to or better than a specified price. 44. The correct answer is (B). A bull market is one that reflects rising prices. 45. The correct answer is (C). Data processing is the transformation of data into usable information. 46. The correct answer is (B). The intranet is a company’s internal network. 47. The correct answer is (C). Amortization applies to intangible objects. Goodwill is an intangible object. 48. The correct answer is (A). Insurance protects individuals from pure risk. 49. The correct answer is (D). Conditions for an insurable loss include that the loss be under the control of the insured, that the probability of the loss be predictable, and that the loss be measurable. 50. The correct answer is (C). $125,000(.75) 5 $93,750 51. The correct answer is (A). Robbery involves a threat of violence; burglary does not. 52. The correct answer is (A). Auto liability insurance is legally required
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in most states. 53. The correct answer is (B). In a country based on socialism, goods and services are purchased and owned by private individuals. POSTTEST Dantes/DSST Program 187 54. The correct answer is (C). U.S. isolation from global markets is not an issue that affects the business system today. 55. The correct answer is (A). Establishing a subsidiary in a foreign nation is one method of entering the global market by direct investment. 56. The correct answer is (B). Total quality management (TQM) policies normally lead to a higher return on investment. 57. The correct answer is (D). The primary functions performed by managers are planning, motivating, and controlling. 58. The correct answer is (C). Internal recruiting is the process of hiring employees from inside the company, including through promotions and transfers. 59. The correct answer is (D). Arbitration is binding; mediation is not. 60. The correct answer is (A). A 5 L 1 OE OE 5 creditors’ claims against resources A 5 L 1 creditors’ claims against resources INTRODUCTION TO BUSINESS 188 Dantes/DSST Program
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FEEDBACK LIST FROM IC Mems: 1. A neutral party that renders a decision between two parties - Arbitrator 2. Annual reports, Financial, Non financial -  3. Autocratic 4. Balance sheet 5. Board of directors 6. Break Event Analysis 7. Capitalism, What is it, Who is the father 8. Collective Bargaining 9. Communism  10. Cost of insurance policy coverage
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