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Q:
Suppose that 1 British pound currently equals 1.62 U.S. dollars and 1 U.S. dollar equals 1.62 Swiss francs. What is the cross exchange rate between the pound and the franc?
a. 1 British pound equals 3.2400 Swiss francs
b. 1 British pound equals 2.6244 Swiss francs
c. 1 British pound equals 1.8588 Swiss francs
d. 1 British pound equals 1.0000 Swiss francs
e. 1 British pound equals 0.3810 Swiss francs
Q:
A major difference between the database and flat-file models is the pooling of data into a common shared database.
Q:
A recovery module suspends all data processing while the system reconciles its journal files against the database.
Q:
Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.41 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 1.64 euros. What is the cross-rate of Swiss francs to euros?
a. 0.43
b. 0.86
c. 1.41
d. 1.64
e. 2.27
Q:
If 1.64 Canadian dollars can purchase one U.S. dollar, how many U.S. dollars can you purchase for one Canadian dollar?
a. 0.37
b. 0.61
c. 1.00
d. 1.64
e. 3.28
Q:
Subschemas are used to authorize user access privileges to specific data elements.
Q:
In the relational model, a data element is called a relation.
Q:
If it takes $0.71 U.S. dollars to purchase one Swiss franc, how many Swiss francs can one U.S. dollar buy?
a. 0.50
b. 0.71
c. 1.00
d. 1.41
e. 2.81
Q:
A customer name and an unpaid balance is an example of a one-to-many relationship.
Q:
When the value of the U.S. dollar appreciates against another country's currency, we may purchase more of the foreign currency with a dollar.
a. True
b. False
Q:
The physical database is an abstract representation of the database.
Q:
Calculating a currency cross rate involves determining the exchange rate for two currencies by using a third currency as a base.
a. True
b. False
Q:
In the database method of data management, access authority is maintained by systems programming.
Q:
Exchange rate quotations consist solely of direct quotations.
a. True
b. False
Q:
There is more than one conceptual view of the database.
Q:
Legal and economic differences among countries, although important, do NOT pose significant problems for most multinational corporations when they coordinate and control worldwide operations of subsidiaries.
a. True
b. False
Q:
Multinational financial management requires that financial analysts consider the effects of changing currency values.
a. True
b. False
Q:
The data definition language is used to insert special database commands into application programs.
Q:
An important feature associated with the traditional approach to data management is the ability to produce ad hoc reports.
Q:
Which of the following statements is NOT CORRECT?
a. Accruals are "free" in the sense that no explicit interest is paid on these funds.
b. A conservative approach to working capital management will result in most, if not all, permanent current operating assets being financed with long-term capital.
c. The risk to a firm that borrows with short-term credit is usually greater than if it borrowed using long-term debt. This added risk stems from the greater variability of interest costs on short-term debt and possible difficulties with rolling over short-term debt.
d. Bank loans generally carry a higher interest rate than commercial paper.
e. Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
Q:
To the user, data processing procedures for routine transactions, such as entering sales orders, appear to be identical in the database environment and in the traditional environment.
Q:
Which of the following statements is CORRECT?
a. Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.
b. Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt.
c. Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
d. Commercial paper is typically offered at a long-term maturity of at least five years.
e. Trade credit is provided only to relatively large, strong firms.
Q:
The database management system provides a controlled environment for accessing the database.
Q:
Sanders Enterprises arranged a revolving credit agreement of $9,000,000 with a group of banks. The firm paid an annual commitment fee of 0.5% of the unused balance of the loan commitment. On the used portion of the revolver, it paid 1.5% above prime for the funds actually borrowed on a simple interest basis. The prime rate was 3.25% during the year. If the firm borrowed $6,000,000 immediately after the agreement was signed and repaid the loan at the end of one year, what was the total dollar annual cost of the revolver?a. $285,000b. $300,000c. $315,000d. $330,750e. $347,288
Q:
Which of the following statements is CORRECT?
a. Conservative firms generally use no short-term debt and thus have zero current liabilities.
b. A short-term loan can usually be obtained more quickly than a long-term loan, but the cost of short-term debt is normally higher than that of long-term debt.
c. If a firm that can borrow from its bank at a 6% interest rate buys materials on terms of 2/10 net 30, and if it must pay by Day 30 or else be cut off, then we would expect to see zero accounts payable on its balance sheet.
d. If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it will not have an adverse financial impact on your firm if the customer periodically pays off its entire balance.
e. Under normal conditions, a firm's expected ROE would probably be higher if it financed with short-term rather than with long-term debt, but using short-term debt would probably increase the firm's risk.
Q:
The database approach to data management is sometimes called the flat file approach.
Q:
A revolving credit agreement is a formal line of credit. The firm must generally pay a fee on the unused balance of the committed funds to compensate the bank for the commitment to extend those funds.
a. True
b. False
Q:
Discuss the changing motivation behind a denial of service attack.
Q:
If a firm has set up a revolving credit agreement with a bank, the risk to the firm of being unable to obtain funds when needed is lower than if it had an informal line of credit.
a. True
b. False
Q:
Explain a distributed denial of service attack.
Q:
Explain a smurf attack.
Q:
A line of credit can be either a formal or an informal agreement between a borrower and a bank regarding the maximum amount of credit the bank will extend to the borrower during some future period, assuming the borrower maintains its financial strength.
a. True
b. False
Q:
A promissory note is the document signed when a bank loan is executed, and it specifies financial aspects of the loan.
a. True
b. False
Q:
Explain a SYN flood attack.
Q:
What are network protocols? What functions do they perform?
Q:
Loans from commercial banks generally appear on balance sheets as notes payable. A bank's importance is actually greater than it appears from the dollar amounts shown on balance sheets because banks provide nonspontaneous funds to firms.
a. True
b. False
Q:
The maturity of most bank loans is short term. Bank loans to businesses are frequently made as 90-day notes which are often rolled over, or renewed, rather than repaid when they mature. However, if the borrower's financial situation deteriorates, then the bank may refuse to roll over the loan.
a. True
b. False
Q:
Explain the function of the two parts of the TCP/IP protocol.
Q:
Define and contrast digital certificate and digital signature.
Q:
An informal line of credit and a revolving credit agreement are similar except that the line of credit creates a legal obligation for the bank and thus is a more reliable source of funds for the borrower.
a. True
b. False
Q:
Describe the basic differences between the star, ring, and bus topologies.
Q:
A firm constructing a new manufacturing plant and financing it with short-term loans, which are scheduled to be converted to first mortgage bonds when the plant is completed, would want to separate the construction loan from its current liabilities associated with working capital when calculating net working capital.
a. True
b. False
Q:
Network communication poses some special types of risk for a business. What are the two broad areas of concern? Explain.
Q:
Long-term loan agreements always contain provisions, or covenants, that constrain the firm's future actions. Short-term credit agreements are just as restrictive in order to protect the interest of the lender.
a. True
b. False
Q:
Contrast a LAN and a WAN. Typically, who owns and maintains a WAN?
Q:
The risk to the firm of borrowing using short-term credit is usually greater than if it used long-term debt. Added risk stems from (1) the greater variability of interest costs on short-term than long-term debt and (2) the fact that even if its long-term prospects are good, the firm's lenders may not be willing to renew short-term loans if the firm is temporarily unable to repay those loans.
a. True
b. False
Q:
If the yield curve is upward sloping, then short-term debt will be cheaper than long-term debt. Thus, if a firm's CFO expects the yield curve to continue to have an upward slope, this would tend to cause the current ratio to be relatively low, other things held constant.
a. True
b. False
Q:
Explain the concept of discretionary access privileges.
Q:
Funds from short-term loans can generally be obtained faster than from long-term loans for two reasons: (1) when lenders consider long-term loans they must make a more thorough evaluation of the borrower's financial health, and (2) long-term loan agreements are more complex.
a. True
b. False
Q:
A formal log-on procedureis the operating system's first line of defense. Explain how this works.
Q:
One of the advantages of short-term debt financing is that firms can obtain short-term credit more quickly than long-term credit.
a. True
b. False
Q:
Discuss three techniques for breaching operating system controls.
Q:
Discuss three sources of exposure (threats) to the operating system.
Q:
Short-term financing is riskier than long-term financing since, during periods of tight credit, the firm may not be able to rollover (renew) its debt. This is especially true if the funds are used to finance long-term assets rather than short-term assets.
a. True
b. False
Q:
Which of the following statements is NOT CORRECT?
a. Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.
b. The cash budget is useful to help estimate future financing needs, especially the need for short-term working capital loans.
c. If a firm wants to generate more cash flow from operations in the next month or two, it could change its credit policy from 2/10 net 30 to net 60.
d. Managing working capital is important because it influences financing decisions and the firm's profitability.
e. A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales, profits, and cash flows during the coming year.
Q:
What are the three security objectives of audit trails? Explain.
Q:
What is an operating system? What does it do? What are operating system control objectives?
Q:
Which of the following statement completions is CORRECT? If the yield curve is upward sloping, then the marketable securities held in a firm's portfolio, assumed to be held for emergencies, should
a. consist mainly of short-term securities because they pay higher rates.
b. consist mainly of U.S. Treasury securities to minimize interest rate risk.
c. consist mainly of short-term securities to minimize interest rate risk.
d. be balanced between long- and short-term securities to minimize the adverse effects of either an upward or a downward trend in interest rates.
e. consist mainly of long-term securities because they pay higher rates.
Q:
Carter & Carter is considering setting up a regional lockbox system to speed up collections. The company sells to customers all over the U.S., and all receipts come in to its headquarters in San Francisco. The firm's average accounts receivable balance is $2.5 million, and they are financed by a bank loan at an 11% annual interest rate. The firm believes this new lockbox system would reduce receivables by 20%. If the annual cost of the system is $15,000, what pre-tax net annual savings would be realized?a. $29,160b. $32,400c. $36,000d. $40,000e. $44,000
Q:
Discuss the public key encryption technique.
Q:
Discuss the private key encryption technique and its shortcomings.
Q:
A lockbox plan is most beneficial to firms that
a. have widely dispersed manufacturing facilities.
b. have a large marketable securities portfolio and cash to protect.
c. receive payments in the form of currency, such as fast food restaurants, rather than in the form of checks.
d. have customers who operate in many different parts of the country.
e. have suppliers who operate in many different parts of the country.
Q:
Explain how SYN Flood attacks can be controlled.
Q:
A lockbox plan is
a. used to identify inventory safety stocks.
b. used to slow down the collection of checks our firm writes.
c. used to speed up the collection of checks received.
d. used primarily by firms where currency is used frequently in transactions, such as fast food restaurants, and less frequently by firms that receive payments as checks.
e. used to protect cash, i.e., to keep it from being stolen.
Q:
Explain how smurf attacks can be controlled.
Q:
On average, a firm collects checks totaling $250,000 per day. It takes the firm approximately 4 days from the day the checks were mailed until they result in usable cash for the firm. Assume that (1) a lockbox system could be employed which would reduce the cash conversion procedure to 2 1/2 days and (2) the firm could invest any additional cash generated at 6% after taxes. The lockbox system would be a good buy if it costs $25,000 annually.
a. True
b. False
Q:
Synchronization of cash flows is an important cash management technique, as proper synchronization can reduce the required cash balance and increase a firm's profitability.
a. True
b. False
Q:
What is deep packet inspection?
Q:
Setting up a lockbox arrangement is one way for a firm to speed up the collection of payments from its customers.
a. True
b. False
Q:
What can be done to defeat a DDoS Attack?
Q:
For a firm that makes heavy use of net float, being able to forecast collections and disbursement check clearings is essential.
a. True
b. False
Q:
What are the auditor's concerns in testing EDI controls?
Q:
Firms hold cash balances in order to complete transactions (both routine and precautionary) that are necessary in business operations and as compensation to banks for providing loans and services.
a. True
b. False
Q:
What is event monitoring?
Q:
Cash is often referred to as a "non-earning" asset. Thus, one goal of cash management is to minimize the amount of cash necessary for conducting a firm's normal business activities.
a. True
b. False
Q:
Discuss the key features of the one-time password technique:
Q:
What are some typical problems with passwords?
Q:
Tierney Enterprises is constructing its cash budget. Its budgeted monthly sales are $5,000, and they are constant from month to month. 40% of its customers pay in the first month and take the 2% discount, while the remaining 60% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month's sales are constant at 50% of projected sales for the next month. "Other payments," which include wages, rent, and taxes, are 25% of sales for the current month. Construct a cash budget for a typical month and calculate the average net cash flow during the month.a. $1,092b. $1,150c. $1,210d. $1,271e. $1,334
Q:
List three methods of controlling unauthorized access to telecommunication messages.
Q:
Baltimore Baking is preparing its cash budget and expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?a. $24,057b. $26,730c. $29,700d. $33,000e. $36,300