Question 1 of 20 5.0 Points Which of the following statements is NOT true about stockholders? A. They are the legal owners of business corporations. B. They own equal shares of company assets. C. They are the part owners of the company. D. Managers pay close attention to their needs and interests. Reset Selection Mark for Review What’s This? Question 2 of 20 5.0 Points Institutional investors are sometimes referred to as: A. Main Street investors. B. Wall Street investors. C. inside investors. D. outside investors. Reset Selection Mark for Review What’s This? Question 3 of 20 5.0 Points In the mid- to late-1990s the stock market was a: A. bull market. B. market in which share prices fell overall. C. bear market. D. None of the above Reset Selection Mark for Review What’s This? Question 4 of 20 5.0 Points Corporate governance involves the exercise of control over a company’s: A. finance and accounting departments. B. entire operations. C. manufacturing facilities. D. marketing and human resources departments. Reset Selection Mark for Review What’s This? Question 5 of 20 5.0 Points The directors of a company are a central factor in corporate governance because they: A. exercise formal legal authority over company policy. B. have the highest stake in the performance of the company. C. have a moral responsibility to fulfill the needs of both the company’s employees and customers. D. inherited the business from their predecessors. Reset Selection Mark for Review What’s This? Question 6 of 20 5.0 Points What was a major contributor to the collapse of Enron in 2001? A. The company’s top executives made bad investments. B. Several failed merger attempts with other firms. C. Lax oversight by the company’s audit committee. D. The bear market of the early 2000s. Reset Selection Mark for Review What’s This? Question 7 of 20 5.0 Points How are directors (members of corporate boards) selected? A. Shareholders elect the directors from a list of candidates. B. The company’s CEO appoints the directors. C. The nominating committee elects the directors. D. Shareholders with the greatest proportional ownership in the company become directors. Reset Selection Mark for Review What’s This? Question 8 of 20 5.0 Points The “agency problem” arises when: A. owners manage their company on their own behalf. B. there is no separation of ownership and control in a company. C. managers act in their own interest, rather than in the interest of shareholders. D. shareholders act in their own interest, rather than in the interest of the board. Reset Selection Mark for Review What’s This? Question 9 of 20 5.0 Points A reason for institutions becoming more assertive in promoting the interests of their member investors is: A. it is difficult for institutions to sell their holdings. B. their members want them to. C. institutions have greater flexibility in selling stocks. D. institutions have nominated members on the finance committee of the board of directors. Reset Selection Mark for Review What’s This? Question 10 of 20 5.0 Points The mission of the Securities and Exchange Commission (SEC) is to: A. protect shareholders’ rights by making sure that stock markets are run fairly. B. protect companies from hostile takeovers. C. ensure that institutional investors do not take control of company management. D. ensure that the federal treasury receives its share of the revenues from stock trading. Reset Selection Mark for Review What’s This? Question 11 of 20 5.0 Points The Securities and Exchange Act of 1934 outlaws: A. any manipulative or deceptive device used to trade stocks. B. compensating company executives with stock options. C. trading in stocks by institutions. D. buying stock in a company for which you work. Reset Selection Mark for Review What’s This? Question 12 of 20 5.0 Points Which organization brings together 300 nonprofit groups to espouse the consumer viewpoint? A. Consumers Union B. Consumer Federation of America C. National Consumer League D. Public Citizen Reset Selection Mark for Review What’s This? Question 13 of 20 5.0 Points A goal of the consumer movement is to make consumer power: A. exceed the rights and powers of firms that sell goods and services. B. exceed the rights and powers of the Food and Drug Administration. C. an effective counterbalance to the rights and powers of firms that sell goods and services. D. an effective counterbalance to the rights and powers of the Food and Drug Administration. Reset Selection Mark for Review What’s This? Question 14 of 20 5.0 Points Which of the following is a core right of consumers? A. The right to safety B. The right to be represented C. The right to purchase D. The right to return goods. Reset Selection Mark for Review What’s This? Question 15 of 20 5.0 Points Manufacturers making false or misleading claims about a competitor’s product is: A. illegal but ethical. B. illegal and unethical. C. legal but unethical. D. legal and unethical. Reset Selection Mark for Review What’s This? Question 16 of 20 5.0 Points Online shoppers have always been concerned that: A. they receive online ads for products similar to the ones they bought earlier on the Web. B. their favorite Web sites provide a large variety of products and services. C. the government might become overly involved in protecting consumer privacy. D. information they reveal in the course of a sales transaction might be misused. Reset Selection Mark for Review What’s This? Question 17 of 20 5.0 Points Which organization advocates the adoption, by businesses, of voluntary policies for protecting the privacy of individuals’ information disclosed during electronic transactions? A. Online Privacy Alliance B. Web Site Alliance C. Open Profiling Standard D. Federal Trade Commission Reset Selection Mark for Review What’s This? Question 18 of 20 5.0 Points The burden of responsibility for product performance has shifted to the producer, under the legal doctrine of: A. rational liability. B. product liability. C. consumer liability. D. supplier liability. Reset Selection Mark for Review What’s This? Question 19 of 20 5.0 Points Under proposals to establish uniform federal standards for determining liability: A. plaintiffs would be discouraged from proceeding to trial. B. companies would not have to go through repeated trials on the same charges in different states. C. judges rather than juries would determine the original amount of punitive damages. D. consumers would have to prove that a manufacturer knew or should have known that a product design was defective. Reset Selection Mark for Review What’s This? Question 20 of 20 5.0 Points In some cases, businesses have banded together to agree on how they will treat their customers. This is called: A. the code of regulation. B. the consumer affairs doctrine. C. voluntary industry codes of conduct. D. industry action standards. Reset Selection Mark for Review What’s This?