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NEW QUESTION 136
The data below is a sampling of the percentage of smokers in a country's population.
Suppose an additional country were added to the data with a smoking rate of 22.5%.
How would the mean and median be affected?
- A. Both the mean and median would increase.
- B. The mean and median would remain the same.
- C. Both the mean and median would decrease.
- D. The mean would decrease and the median would increase.
Answer: D
NEW QUESTION 137
A company's Balance Sheet for the year ended Dec. 31, 2013 is as follows:
(In millions)
The company is MOST likely in which of the following industries?
- A. Civil aviation
- B. Commercial banking
- C. Pharmaceutical
- D. Retailing
Answer: B
NEW QUESTION 138
A stockbroker wishes to examine the relationship between merger failures and stock prices. For 30 days, data were collected for closing stock prices each day and the number of merger failures announced that day. After reviewing the data, the stockbroker believes that merger failures affect stock market prices for more than one day. Which of the following measures would help the stockbroker incorporate that effect into the regression model?
- A. Include dummy variables
- B. Include lagged variables
- C. Introduce a variable that is collinear with number of news reports on merger failure
- D. Include other independent variables, such as the number of news reports on dividend released each day
Answer: B
NEW QUESTION 139
A coal burning power plant in upstate New York has been the only provider of power in the region for many years. Recently, a plant that uses wind to create energy was built nearby. The wind plant produces less energy than the coal plant but at a lower cost. Will the coal plant be able to remain competitive in this new market environment?
- A. No, the coal plant will be forced to cut prices and operate at a loss.
- B. Yes, if the coal plant sells energy at a price below its marginal cost.
- C. Yes, if the coal plant's decreased output is still sufficient to recover costs.
- D. No, the coal plant's customers will switch to the wind powered plant.
Answer: C
NEW QUESTION 140
The Beveridge curve displays the relationship between the unemployment rate and the job vacancy rate (the number of unfilled jobs divided by the labor force). A government official wants to forecast the job vacancy rate for next month to see whether jobs posted now are likely to be filled. The official runs a simple regression using monthly U.S. data from 20012013; the results are given below.
If the unemployment rate next month is expected to be 6.6% and the vacancy rate this month was 2.58%, by how much is the vacancy rate forecasted to change? Note that percentages are given as values between 0 and 1.
- A. The job vacancy rate is forecasted to decrease by 3.88 percentage points.
- B. The job vacancy rate is forecasted to increase by 2.39 percentage points.
- C. The job vacancy rate is forecasted to decrease by 0.18 percentage points.
- D. The job vacancy rate is forecasted to decrease by 20.23 percentage points.
Answer: C
NEW QUESTION 141
After a small country begins permitting the import of automobiles, a foreign automobile manufacturer begins shipping cars to the country. This manufacturer can produce cars much more cheaply than the only manufacturer located in the country and therefore enjoys significant profits. What will erode the profits for the foreign manufacturer?
- A. Demand for cars in other countries will also increase.
- B. Other foreign manufacturers will also begin shipping cars to the country.
- C. The foreign manufacturer's per-unit costs will increase as its output increases.
- D. The foreign manufacturer will build a plant inside the country.
Answer: B
NEW QUESTION 142
A company's retained earnings on Dec. 31st, 2009 to 2013 is as follows:
On the pro-forma income statement for 2014, the net income is $10,000. The expected dividends to be paid in 2014 is $3,500. What is the projected retained earnings on Dec. 31st, 2014?
- A. $35,000
- B. $31,500
- C. $18,500
- D. $15,000
Answer: B
NEW QUESTION 143
A technology and design company has created a new type of keyboard with different letter placement to make typing easier and more efficient. This new design is also cheaper to manufacture, and the company is able to price the keyboard lower than its competitors. However, sales have been extremely low. What is the MOST likely explanation?
- A. Consumers find it difficult to switch keyboards once they have learned to type.
- B. Consumers do not understand the company's differentiation strategy.
- C. Consumers' demand for keyboards is relatively inelastic.
- D. Consumers have strong loyalty to existing keyboard manufacturers.
Answer: A
NEW QUESTION 144
Which of the following businesses is LEAST likely to locate its stores close to its competitors' stores?
- A. A home goods store which frequently offers sales
- B. A boutique clothing store which sells expensive but high-quality apparel
- C. An ice cream chain which has built strong customer loyalty due to its distinctive flavors
- D. A car dealership which sells a different brand of car than its nearby competitors
Answer: A
NEW QUESTION 145
A chain of grocery stores operates in two neighboring towns. The store in one of the towns charges five percent more than the other store for the same products. How can the company charge different prices and remain competitive?
- A. The grocery chain pays higher rent at the store where it charges higher prices.
- B. Delivery of produce to the expensive store costs more than to the cheaper store.
- C. Shoppers living near the expensive store are unwilling to drive farther for lower prices.
- D. The grocery chain has no substitutes in either town.
Answer: C
NEW QUESTION 146
Company A has been profitable for the past five years but the Retained Earnings reported on the financial statements has not grown. Which of the following statements could explain the situation?
- A. Company A has paid dividends to shareholders each year.
- B. Company A has invested heavily in new machinery and equipment.
- C. Company A has issued additional shares of common stock.
- D. Company A has paid down a portion of its long term debt.
Answer: A
NEW QUESTION 147
Which of the following companies could expect to have the fewest competitors? (Select all that apply.)
- A. Automobile manufacturer
- B. Airline
- C. Restaurant
- D. Tutoring service for grade school math
- E. Real estate agency
Answer: A,B
NEW QUESTION 148
In determining free cash flows, how is the change in net working capital calculated?
- A. Current Assets (previous year) - Current Assets (year projected)
- B. Receivables minus Payables (year projected) - Receivables minus Payables (previous year)
- C. Current Assets minus Current Liabilities (year projected) - Current Assets minus Current Liabilities (previous year)
- D. Ending balance of cash (previous year) - Ending balance of cash (year projected)
Answer: C
NEW QUESTION 149
Company A has a Weighted Average Cost of Capital (WACC) of 12 percent. They are evaluating four different projects/investments with financial flows as described below. Available funds are limited, so they can only pursue one of the investment alternatives. Each project/investment involves an initial outflow of $1,000,000 and has an eight year life.
Which project should they select?
- A. Project 4
- B. Project 2
- C. Project 3
- D. Project 1
Answer: A
NEW QUESTION 150
A company reduces the price of its product, hoping to increase its overall profits. When the quarterly numbers come in, the company sees that the decrease in price has led to a decrease in profits. It decides to change the price back to its original price, but profits still do not recover to their original levels. What happened?
- A. Demand has become more elastic since the first price change.
- B. Demand has become less elastic since the first price change.
- C. The company experienced economies of scale at the lower price.
- D. The price elasticity of demand was 1 before the first price change.
Answer: A
NEW QUESTION 151
A trainer believes that a new workout regimen has helped athletes score more points per game. If the previous mean for points scored per player per game was 5.3, which alternative hypothesis below is the trainer trying to substantiate?
- A. u=5.3
- B. u<5.3
- C. u5.3
- D. u>5.3
Answer: D
NEW QUESTION 152
Which of the following options is an example of an expense?
- A. Payment of $6,000 for vehicle insurance covering the next year
- B. Consumption of $500 of electricity for the head office building
- C. Purchase of $10,000 of fabric to be used by a clothing manufacturer
- D. Purchase of a new vehicle for $30,000 by a delivery company
Answer: B
NEW QUESTION 153
A company reported the following information for 2013:
During 2013, the company purchased new inventory of $160,000. What amount should the company report as cost of goods sold on its 2013 income statement?
- A. $160,000
- B. $100,000
- C. $60,000
- D. $220,000
Answer: B
NEW QUESTION 154
A weight loss clinic had 1,000 clients last year. The distribution of the changes in clients' weights is shown below.
Which of the following Excel formulas would correctly calculate the 95% confidence interval for the true average change in weight? Please note that the formula for calculating confidence intervals in Excel is =CONFIDENCE.NORM(alpha, standard_dev, size).
- A. -1.2 +- CONFIDENCE.NORM(0.025, 2.3, 1000)
- B. -1.2 +- CONFIDENCE.NORM(0.05, 3.5, 1000)
- C. -1.2 +- CONFIDENCE.NORM(0.025, 3.5, 1000)
- D. -1.2 +- CONFIDENCE.NORM(0.05, 2.3, 1000)
Answer: B
NEW QUESTION 155
An athletic shoe company is trying to establish a stronger brand identity with consumers. Its objective is to first understand, broadly, how consumers value its brand compared to its
competitors and then determine how much consumers value specific features of its competitors' products. Which of the following approaches would be MOST effective in gathering this information?
- A. Hold an auction to sell various models of the company's shoes.
- B. Conduct a focus group and then a survey.
- C. Gradually lower prices to determine demand.
- D. Conduct a survey and then run a conjoint analysis.
Answer: D
NEW QUESTION 156
An online music streaming company has two subscription options:
1.Listen to unlimited music with five minutes of advertisements for every hour of music.
2.Pay a monthly fee and listen to unlimited music with no ads.
If a potential customer wants to subscribe to the company but is indifferent between options 1 and 2, the customer's willingness to pay (WTP) is:
- A. Positive for music and unknown for advertising.
- B. 0 for music and negative for advertising.
- C. Positive for music and negative for advertising.
- D. Positive for music and positive for advertising.
Answer: C
NEW QUESTION 157
During a prolonged recession, a hotel chain sees reservations at one of its locations decline by five percent. The chain soon decides to close that location. Why would a small change in capacity utilization have this effect?
- A. The consumers most affected by the recession are generally those with lower willingness to pay.
- B. Fixed costs are too high for the hotel to remain profitable at this decreased quantity.
- C. Closing the location will allow the hotel chain to recover some of its sunk costs.
- D. Demand for hotel rooms in this location is extremely elastic.
Answer: B
NEW QUESTION 158
After a new report concludes that airplane exhaust has a negative impact on the environment, a government regulation is introduced which reduces the number of flights airlines can make in a day by 10 percent. To comply with this regulation, a certain airline halves the frequency of flights on several of its routes but maintains its original fleet of airplanes. What happens to the costs for the airline?
- A. Total costs for the airline will increase.
- B. Average cost per flight will increase.
- C. Total costs will fall by 10 percent.
- D. Cost for each additional flight will increase.
Answer: B
NEW QUESTION 159
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