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Finance
Q:
Discuss the benefits to funds' suppliers of using a financial intermediary asset transformer in place of directly purchasing claims such as stocks or bonds. What is the major disadvantage?
Q:
How can a depository intermediary afford to purchase long-term risky direct claims from fund's demanders and finance these purchases with safe, liquid, short-term, low denomination deposits? What can go wrong in this process?
Q:
You are a corporate treasurer seeking to raise funds for your firm. What are some advantages of raising funds via a financial intermediary (FI) rather than by selling securities to the public?
Q:
What have been the major factors contributing to growth in the foreign financial markets?
Q:
How can using indirect finance rather than direct finance reduce agency costs associated with monitoring funds' demanders?
Q:
What does an asset transformer do? Why is asset transformation a risky activity?
Q:
How can brokers and dealers make money? Which activity is riskier? Why?
Q:
Discuss how secondary markets benefit funds issuers.
Q:
IBM creates and sells additional stock to the investment banker, Morgan Stanley. Morgan Stanley then resells the issue to the U.S. public.
A negotiable CD is
A. a time draft payable to a seller of goods, with payment guaranteed by a bank
B. a loan to an individual or business to purchase a home, land, or other real property
C. a short-term fund transferred between financial institutions usually for no more than one day
D. a marketable bank issued time deposit that specifies the interest rate earned and a fixed maturity date
E. a short-term unsecured promissory note issued by a company to raise funds for a short time period
Q:
What factors are encouraging financial institutions to offer overlapping financial services such as banking, investment banking, brokerage, etc.?
I. Regulatory changes allowing institutions to offer more services
II. Technological improvements reducing the cost of providing financial services
III. Increasing competition from full service global financial institutions
IV. Reduction in the need to manage risk at financial institutions
A. I only
B. II and III only
C. I, II, and III only
D. I, II, and IV only
E. I, II, III, and IV
Q:
There are three types of major financial markets today: primary, secondary, and derivatives markets. The NYSE and NASDAQ are both examples of derivatives markets.
Q:
Financial intermediaries such as banks typically have assets that are riskier than their liabilities.
Q:
Money markets are the markets for securities with an original maturity of 1 year or less.
Q:
Privately placed securities are usually sold to one or more investment bankers and then resold to the general public.
Q:
The NYSE is an example of a secondary market.
Q:
In a private placement, the issuer typically sells the entire issue to one, or only a few, institutional buyers.
Q:
Secondary markets are markets used by corporations to raise cash by issuing securities for a short time period.
Q:
Primary markets are markets where users of funds raise cash by selling securities to funds' suppliers.
Q:
Which of the following modes of communication offers the recipient only linguistic cues?
A) face-to-face communication
B) telephonic conversation
C) e-mail communication
D) videoconferencing
Q:
Negotiations conducted using which of the following modes of communication are more likely to reach integrative (win-win) outcomes and more balanced distributions of surplus?
A) e-mails
B) telephonic conversation
C) face-to-face
D) instant messaging
Q:
You are planning to negotiate a sales contract with a potential client. This is a new client and you are very keen on acquiring this account. Which of the following modes of communication should you select?
A) computer messaging
B) telephonic conversation
C) videoconferencing
D) face-to-face communication
Q:
Which of the following modes of communication offers both parties the most kinetic cues?
A) videoconferencing
B) face-to-face communication
C) telephonic conversation
D) computer messaging
Q:
In which of the following modes of communication are the sender and the receiver likely to have the least psychological distance between them?
A) e-mail messaging
B) telephone conversations
C) written correspondence
D) face-to-face communication
Q:
Your team is negotiating a sales contract with a potential client. One of your team members says, "I wish we could use some other mode of communication because this one is creating a huge psychological distance between us and our potential clients." Which of the following modes of communication are you using?
A) face-to-face communication
B) videoconferencing
C) computer messaging
D) telephonic conversation
Q:
The least-rich mode of communication among the following is ________.
A) videoconferencing
B) numerical documentation
C) face-to-face communication
D) voice mail messages
Q:
Which of the following modes of communication conveys the richest information?
A) e-mail
B) memos
C) voice mail
D) face-to-face
Q:
The ________ of a communication medium is the potential information-carrying capacity of the communication medium.
A) breadth
B) intensity
C) richness
D) depth
Q:
With reference to the place-time model of interaction, the communication accomplished through voice mail takes place ________.
A) at the same time and in the same place
B) at the same time and in a different place
C) at a different time and in the same place
D) at a different time and in a different place
Q:
With reference to the place-time model of interaction, which of the following modes of interaction can accomplish a communication that takes place at the same time but at different places?
A) e-mail
B) videoconference
C) voice mail
D) face-to-face
Q:
With reference to the place-time model of interaction, which of the following modes of interaction can accomplish a communication that takes place at the same time and at the same place?
A) videoconference
B) voice mail
C) face-to-face
D) e-mail
Q:
According to the framing effect, people are risk-averse for gains and risk-seeking for losses.
Q:
E-mail acts as an equalizer because the absence of status cues makes it difficult for high-status people to dominate the discussion.
Q:
Negotiators who communicate face-to-face are less likely to reach deals and avoid impasses than are e-negotiators.
Q:
The sinister attribution bias refers to the tendency for e-communicators to ascribe diabolical intentions to the other party.
Q:
Both visual anonymity and remote distance inhibit the activation of the continuation norm.
Q:
There is more turn-taking in negotiations conducted via e-mail than in face-to-face negotiations.
Q:
Face-to-face meetings are ideal for wrestling with complex negotiations.
Q:
Negotiators are less cooperative when interacting face-to-face than over the telephone.
Q:
As compared to face-to-face communication, memos and business correspondence provide more cues about the context, thereby providing people with a greater awareness of context.
Q:
Formal numerical documentation conveys the richest information of any medium.
Q:
Discuss the key biases that affect the ability of people to negotiate via e-mail.
Q:
What are the key challenges to "same time, different place" negotiations?
Q:
You want to put a working group together for a long, complex project. The goal of the project is to develop a Web-based application for an international client. The project will need coordination among different people who will have to work from different geographic regions. While selecting the team members you make sure that the members already know each other. Which of the following is the strongest argument that supports your decision?
A) When negotiators interact via technology, power and status differences are minimized.
B) As compared to face-to-face teams, virtual teams are better at brainstorming and generating new ideas.
C) Even a short face-to-face meeting among people can reduce uncertainty and build trust.
D) Face-to-face teams communicate better initially but their performance deteriorates over time.
Q:
Negotiators interacting through which of the following modes of communication would feel a greater amount of rapport?
A) voice mail
B) videoconference
C) face-to-face communication
D) telephonic conversation
Q:
You are in the process of negotiating a sales contract with a new client. The product you are selling is high-quality and has received excellent reviews from customers. You have a strong bargaining position in this negotiation. In such a situation, which of the following will be the ideal mode of communication for negotiating the contract with the new client in order to receive the maximum benefit?
A) e-mail
B) instant messaging
C) telephone
D) face-to-face
Q:
Relative to face-to-face negotiations, people who negotiate online ________.
A) trust each other more before beginning the negotiation
B) are more interested in future relationships with the other party
C) trust each other more after the online interaction
D) report less overall satisfaction with the negotiation
Q:
The "sinister attribution error" is the tendency for people to ________.
A) rely too heavily on one trait or piece of information when making decisions
B) attribute malevolent motives to people who represent the out-group
C) view two options as more dissimilar when evaluating them simultaneously than when evaluating them separately.
D) underestimate task-completion times for a given set of tasks
Q:
After an argument with her colleague, Sara recounted the incident to her friend, saying, "She's getting more hostile by the day. She always takes offence at the slightest thing." Her friend reminded her that the colleague had been unwell recently and was still taking medication, which probably accounted for her irritability. In this case, Sara's behavior can be explained by the ________.
A) sinister attribution bias
B) impact bias
C) group attribution error
D) outgroup homogeneity
Q:
The ________ bias is the tendency for negotiators to adopt an adversarial negotiation style when communicating via e-mailwhereas the same negotiator might use a positive emotional style in
a face-to-face interaction.
A) anchoring
B) omission
C) flaming
D) exit
Q:
The "sinister attribution error" is the tendency for people to attribute malevolent motives to ________.
A) people who they work with on a regular basis
B) their immediate superiors in the organization
C) people they don't know or who represent the out-group
D) those performing low-skilled work
Q:
William works as a sales manager for a company which exports garments. William is negotiating a sales contract with an international client. He is conducting the negotiation through e-mails. Which of the following is he more likely to observe?
A) Conflicts are expressed, recognized, and addressed quickly.
B) The negotiations usually reach integrative outcomes.
C) He could quickly clarify his doubts due to frequent feedback.
D) The counterparty adopts an adversarial negotiation style.
Q:
It is generally observed that people are more likely to engage in counter-normative social behavior when interacting via e-mail. Which of the following statements, if true, would most likely weaken this argument?
A) When interacting via e-mail, people often misattribute the behavior of others to their underlying character traits while ignoring the influence of temporary, situational factors.
B) In the case of e-mail communication, both visual anonymity and remote distance inhibit the activation of the continuation norm.
C) While writing e-mails, people pay more attention to the style of the message rather than to the content of the message.
D) While communicating with e-mails, people tend to attribute malevolent motives to people they don't know or who represent the out-group.
Q:
The ________ refers to the perception that negotiation is unstable and should be terminated.
A) recency effect
B) conjunction fallacy
C) flaming bias
D) exit bias
Q:
Which of the following statements is true for negotiations conducted via e-mail?
A) E-negotiators are forced to make more assumptions than face-to-face negotiators.
B) There is more turn-taking in negotiations conducted via e-mail than in face-to-face negotiations.
C) E-negotiators ask more clarifying questions than do face-to-face negotiators.
D) Negotiations conducted via e-mail allow people to correct misunderstandings immediately.
Q:
Which of the following is a key bias that affects the ability of people to negotiate via e-mail?
A) omission bias
B) flaming bias
C) impact bias
D) distinction bias
Q:
The temporal synchrony bias is the tendency for negotiators to ________.
A) view two options as more dissimilar when evaluating them simultaneously than when evaluating them separately
B) have a stronger preference for more immediate payoffs relative to later payoffs
C) overestimate one's degree of influence over other external events
D) behave as if they are communicating at the same time when in fact they are not
Q:
U.S.-based Bluegray Designs is undertaking a project for a client based in Sweden. As a result, most negotiation interactions will take place through telephone conferences or e-mail. Which of the following demonstrates that this system will be an advantage for Bluegray?
A) Conflicts are expressed more quickly if negotiators work in close proximity.
B) Greater distance tends to block the feedback loops provided in face-to-face negotiations.
C) The formality of a scheduled phone meeting allows parties to better prepare for the negotiation.
D) Distance eliminates the tendency of negotiators to chat informally.
Q:
U.S.-based Bluegray Designs is undertaking a project for a client based in Sweden. As a result, most negotiation interactions will take place through telephone conferences or e-mail. Which of the following demonstrates that this system will be a disadvantage for Bluegray?
A) When negotiators are not face-to-face, they reach more integrative agreements when they believe that the other party is nearby rather than far away.
B) The formality of a scheduled phone meeting may compel parties to better prepare for the negotiation.
C) Conflicts are expressed, recognized, and addressed more quickly if negotiators work in close proximity.
D) Distance creates a "buffer zone" between parties, minimizing nonverbal cues.
Q:
Conflicts are expressed, recognized, and addressed more quickly ________.
A) in the absence of frequent feedback
B) when the negotiators interact asynchronously
C) when plenty of time is available for negotiations
D) if negotiators work in close proximity
Q:
DEC Inc. recently revamped its headquarters, abandoning its open-plan system for private cubicles that allow employees to work with minimum distraction. However, it was noted that the productivity during meetings decreased and the time taken to reach a decision lengthened significantly after the switch. What can DEC do to remedy this situation and improve consensus?
A) DEC should install a company-wide instant messaging service and encourage employees to use it.
B) DEC should make it mandatory for all issues to be handled through e-mail.
C) DEC should limit employees' access to social networking websites and non-work-related sites.
D) DEC should ask employees to mail a status report of their daily activities at the end of each day.
Q:
Max is the CEO of Telemax Inc. He realizes that the informal communication that occurs in his organization is what is most important and most critical to ensuring better communication during meetings. Which of the following modes of communication should he encourage in order to boost informal communication among his employees?
A) videoconferencing
B) telephonic conversations
C) instant messaging
D) voice mail
Q:
Which of the following is likely to be the most limiting aspect of same-time, different-place negotiations?
A) the lack of an appropriate communication channel
B) the increase in the time required for negotiation
C) the loss of informal communication
D) the decrease in the level of cooperation
Q:
Your company is opening branches in three new cities. You foresee the need for daily communication between employees in the different branches for an update on the day's work. Which of the following methods of communication will allow you to communicate at the same time, from different places, while minimizing psychological distance and maximizing nonverbal cues?
A) videoconferencing
B) instant messaging
C) voice mail
D) e-mail messages
Q:
You are negotiating a sales contract with a new client. You are aware of the fact that people rely primarily on nonverbal signals to help them conduct social interactions. Thus, in order to encourage a good rapport between you and the counterparty, you should ________.
A) maintain an indirect body orientation
B) maintain steady eye contact
C) lean backward
D) cross your arms
Q:
You are negotiating a sales contract with a potential client and get the feeling that you won't be able to develop a good rapport with him. You most likely observe that your potential client ________.
A) is sitting with a forward lean
B) has an open body posture
C) is maintaining steady eye contact
D) is sitting with crossed arms
Q:
Which of the following is an advantage of e-negotiations?
A) E-negotiations reach more integrative outcomes than face-to-face negotiations.
B) As compared to face-to-face negotiations, e-negotiations result in increased overall satisfaction for both the parties.
C) During e-negotiations power and status differences are minimized.
D) E-negotiators are less likely to suspect the other party of lying or deceiving them, relative to negotiators interacting face-to-face.
Q:
Which of the following statements is true regarding e-mail communication?
A) As compared to face-to-face negotiation, people negotiating via e-mail are less likely to negatively confront one another.
B) It provides a continuous feedback loop so that people can immediately clarify their doubts.
C) As compared to face-to-face negotiation, e-mail negotiations offer more context cues and are therefore richer.
D) People who would normally not approach others in person are much more likely to initiate e-mail exchange.
Q:
Which of the following modes of communication does not offer the recipient paralinguistic cues?
A) videoconferencing
B) face-to-face communication
C) computer messaging
D) telephonic communication
Q:
Explain how escalation of commitment can be avoided in a negotiation?
Q:
Discuss the steps to be taken for encouraging cooperation in social dilemmas when companies should not privately collude.
Q:
You are involved in a negotiation and you observe that the negotiations are quickly deteriorating and still the negotiators continue their course of action. Which of the following terms best describes this behavior of the negotiators?
A) the anchoring bias
B) the framing effect
C) the escalation of commitment
D) the hindsight bias
Q:
Which of the following steps can be taken to encourage cooperation in social dilemmas when companies should not privately collude?
A) Use a complex strategy to deal with the situation.
B) Be the first to defect.
C) Focus on your payoffs relative to others.
D) Be sensitive to egocentric bias.
Q:
It is generally observed that the public behavior of people is more cooperative than private behavior. So in a negotiation situation you are expecting the negotiators to behave in a cooperative manner, however you observe that the negotiators are bargaining hard and are behaving in a very competitive manner. Which of the following statements can explain this discrepancy?
A) The negotiators are trying to recover from an escalating spiral of defection.
B) The negotiators are using the tit-for-tat strategy.
C) The negotiators are focusing on their own payoffs rather than their payoffs relative to others.
D) The negotiators are bargaining on behalf on their organizations.
Q:
________ are punishments that are administered in a community or a group when defection occurs.
A) Sunk costs
B) Social sanctions
C) Escalated commitments
D) Superordinate goals
Q:
Which of the following actions is most likely to result in a dramatic increase in cooperation?
A) appointing an autocratic group leader
B) decreasing the risk associated with defection
C) imposing social sanctions
D) allowing group members to communicate with each other
Q:
Which of the following statements is true regarding a psychological contract?
A) Structural strategies are implemented with the help of psychological contracts.
B) Psychological contracts are binding in a court of law.
C) Psychological contracts are based on the fact that people feel committed to follow through with their word.
D) Psychological contracts are commonly known as escalated commitments.
Q:
Psychological contracts are commonly known as ________.
A) handshake deals
B) superordinate goals
C) escalated commitments
D) social sanctions
Q:
In the case of ________, instead of competing for scarce resources (like the right to pollute), companies purchase the rights to pollute or to use scarce resources.
A) regulation
B) privatization
C) tradable environmental allowance arrangements
D) participative management
Q:
Privatization involves ________.
A) government intervention to correct market imperfections, with the idea of improving social welfare
B) putting public resources under the control of specific individuals or groups
C) appointing an autocratic leader to monitor the behavior of people
D) inducing cooperation by monitoring the risk associated with defection
Q:
When a leader is introduced into a social dilemma situation, especially a(n) ________ leader, individual group members might fear restriction of their freedom.
A) transformational
B) autocratic
C) Laissez-faire
D) democratic