Multiple Choice Answers

Question 1

Financial rewards include direct payments plus indirect payments in the form of:
A. individual equity.
B. corporate compensation.
C. spot awards.
D. employee benefits.
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Question 2
If pay systems are to accomplish the objectives set for them, ultimately they must be perceived as:
A. adequate and equitable.
B. generous and timely.
C. immediate and fair.
D. relevant and competitive.
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Question 3

Which of the following laws established the first national minimum wage?
A. Davis-Bacon Act
B. Fair Labor Standards Act
C. Walsh-Healy Act
D. McNamara-O’Hara Service Contract Act
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Question 4

Which act states that overtime is required only for hours worked in excess of 40 per week, not 8 per day, as previously?
A. Federal Labor Relations Act
B. Labor Management Reporting and Disclosure Act
C. McNamara-O’Hara Service Contract Act
D. Defense Authorization Act
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Question 5

Common job characteristics that an organization is willing to pay for, such as skill, effort, responsibility, and working conditions are termed:
A. workload standards.
B. benchmark jobs.
C. compensable factors.
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Question 6

Relevant labor markets should consider __________ as well as product-market competitors.
A. workload standards
B. internal equity
C. geographical boundaries
D. survey data
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Question 7

Alternatives to pay systems based on job evaluation include all of the following EXCEPT:
A. education-based pay.
B. skill-based pay.
C. market-based pay.
D. knowledge-based pay.
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Question 8

A narrowing of the ratios of pay between jobs or pay grades in a firm’s pay structure is pay:
A. secrecy.
B. compression.
C. security.
D. inequality.
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Question 9

One solution to the problem of pay compression is to institute:
A. equity adjustments.
B. merit-pay increases.
C. compensation concentration.
D. salary caps.
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Question 10

The fact that past merit payments are incorporated into an individual’s base salary allowing formerly productive employees to slack off is known as:
A. merit allowance.
B. a disincentive.
C. a union contract.
D. the annuity problem.
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Question 11

An employer awarding an employee’s exceptional performance with a small, one-time bonus shortly after the noteworthy actions is a __________ bonus.
A. lump-sum
B. spot
C. surprise
D. competency-based
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Question 12

Which law offers full coverage for retirees, dependent survivors, and disabled persons insured by 40 quarters of payroll taxes on their past earnings or earnings of heads of households?
A. Federal Unemployment Tax Act
B. Social Security Act
C. Workers’ compensation
D. Employee Retirement Income Security Act
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Question 13

The benefits of this act are based on a percentage of average weekly earnings and are available for up to 26 weeks.
A. Administrative Procedure Act
B. Social Security Act
C. Balanced Budget Act
D. Federal Unemployment Tax Act
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Question 14

Which act covers private-sector employees over age 21 enrolled in noncontributory (100% employer-paid) retirement plans who have one year’s service?
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Question 15

The anti-discrimination rule holds that employers can obtain tax advantages only for those benefits that do not discriminate in favor of:
A. white males.
B. stockholders.
C. highly compensated employees.
D. younger employees.
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Question 16

Plans are known as __________ when the employees share in the cost of the premiums.
A. share-based
B. contributory
C. distributive
D. peer participating
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Question 17

An individual or group health plan that provides or pays the cost of medical care may not use or disclose __________ except with the consent or authorization of the individual in question.
A. salary information
B. cost of insurance premiums
C. spousal information
D. protected health information
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Question 18

__________ programs typically provide a core of basic life coverage and then permit employees to choose greater coverage.
A. Flexible benefit
B. Defined-benefit
C. Defined-contribution
D. Point-of-service
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Question 19

Which of the following is NOT an area of payment covered by workers’ compensation?
A. Payments to employers while injured workers are recovering
B. Payments to replace lost wages
C. Medical treatment and rehabilitation costs
D. Retraining to perform a different type of work
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Question 20

The type of private pension plan in which an employer promises to pay a retiree a stated pension is a:
A. defined-benefit plan.
B. defined-performance plan.
C. defined-retirement plan.
D. defined-contribution plan.

Multiple Choice Answers

Question 1
Which of the following statements about RJPs is true?
A. Job performance rates are lower for those who receive an RJP.
B. Meta-analysis shows that RJPs improve retention rates, on average, by 5 percent.
C. It requires that recruiters tell applicants the pleasant and unpleasant aspects of the job.
D. Job acceptance rates are higher for those who receive an RJP.

Question 2

The __________ theory of selection states that just as organizations choose people, people choose jobs and organizations that fit their personalities and career objectives and in which they can satisfy needs that are important to them.
A. matching
B. prospecting
C. mating
D. discerning

Question 3
Which of the following is NOT considered to be a necessary procedure to follow when seeking information about an applicant from references?
A. Submit references to a polygraph exam to evaluate their credibility.
B. Request only job-related information.
C. Wherever possible, use public records to evaluate personal conduct.
D. Evaluate the credibility of the source of the reference information.

Question 4
__________ is the set of characteristics of a person that account for the consistent way he/she responds to situations.
A. Attitude
B. Personality
C. Reliability
D. Validity

Question 5
Recommendations for improving the validity of the employment interview include all of the following EXCEPT:
A. rely on interviewer first impressions.
B. use open-ended questions.
C. focus only on the competencies necessary for the job.
D. conduct the interview in a relaxed physical setting.

Question 6
How firms compete with each other and how they attain and sustain competitive advantage is the essence of __________ management.
A. operations
B. financial
C. strategic
D. data

Question 7
HR strategy:
A. is the set of priorities a firm uses to align its resources, policies, and programs with its strategic business plan.
B. is the result of an analysis of the future availability of labor and future labor requirements, tempered by an analysis of external conditions.
C. is the process of identifying top talent, both within functions and corporate-wide, to develop pools of talent for critical positions, and to identify development plans for key leaders.
D. provides an overall direction and focus for the organization as a whole, including for each functional area of the business.

Question 8
Workforce planning focuses on firm-level responses to __________ business issues over multiple time horizons.
A. corporate
B. people-related
C. global
D. community-related

Question 9
All of the following statements about competency models are true EXCEPT:
A. they attempt to identify variables related to overall organizational fit.
B. their level of rigor and documentation is more likely to enable them to withstand the close scrutiny of a legal challenge.
C. they attempt to identify personality characteristics consistent with the organization’s vision.
D. their focus is on the full range of knowledge, skills, abilities, and other characteristics that are needed for effective performance on the job, and that characterize exceptional performers.

Question 10
After identifying the behavioral requirements of jobs, the organization is in a position to identify the __________ and the skills required to do those jobs.
A. range of salaries
B. personality types
C. most appropriate gender
D. number of employees

Question 11
The purpose of a(n) __________ is to enlarge the pool of people qualified to fill the projected vacancies through such actions as recruitment, selection, training, placement, transfer, promotion, development, and compensation.
A. action plan
B. HR strategy
C. workforce forecast
D. talent inventory

Question 12
The purpose of workforce forecasting is to estimate __________ at some future time period.
A. production costs
B. the need for talent inventories
C. labor requirements
D. the need for tactical planning

Question 13
The step following recruitment is __________, which is basically a rapid, rough “selection” process.
A. orientation
B. initial screening
C. performance management
D. workforce planning

Question 14
Which of the following is a concerted effort by the organization to actively expand the pool of applicants so that no one is excluded because of past or present discrimination?
A. Hard quotas
B. Pure diversity-based recruitment
C. Diversity-based recruitment with preferential hiring
D. Passive nondiscrimination

Question 15
Which of the following is NOT a consideration when determining the right predictor to be used in the staffing process?
A. The nature of the job
B. The selection ratio
C. The personality of the applicant
D. The cost of the predictor
Question 16
Organizations periodically turn to __________ to meet demands for talent brought about by business growth, a desire for fresh ideas, or to replace employees who leave.
A. their subsidiaries
B. entry-level employees
C. outside labor markets
D. former employees

Question 17
Today __________ is an established practice in many organizations, especially for filling jobs up to the lower executive level.
A. creating temporary work pools
B. employee referrals
C. using headhunters
D. job posting

Question 18
Promotion-from-within policies must __________, coupled with a company philosophy that permits employees to consider available opportunities within the organization.
A. comply with all state laws
B. respect seniority position
C. receive strong top management support
D. anticipate training needs

Question 19
According to the text, __________, originally used in the sports world, are now common among executives, professionals, and middle-level executives, as companies seek to buttress the eroding bonds between them and their employees.
A. referral bonuses
B. signing bonuses
C. retention bonuses
D. paid practical

Question 20
__________ affect recruitment policies because firms often give preference to current employees in promotions, transfers, and other career-enhancing opportunities.
A. Union employee percentages
B. Labor market characteristics
C. EEOC guidelines
D. Internal labor markets

Multiple Choice Answers

1. The two largest metropolitan areas in Canada are Toronto and
A. Ottawa.
B. Vancouver.
C. Edmonton.
D. Montréal.
2. Which of the following is the primary aim of the Parti Québécois?
A. Improving economic opportunities for French-speaking Canadians
B. Garnering higher income from the operation of the St. Lawrence Seaway
C. Establishing Quebec as an independent country
D. Secession from Canada in order to become a Department of France

3. Which of the following were the main proponents of NAFTA?
A. Environmentalists
B. Large corporations
C. Labor unions
D. Human rights groups

4. _______ refers to a series of vertical zones with distinctive climate and vegetation regimes.
A. Temperature inversions
B. Altitudinal zonation
C. Urban expanses
D. Sedimentation
5. _______ is one of the first Latin American countries to have a separate ministry of tourism with
dedicated funds within its federal governmental structure.
A. Mexico
B. Guatemala
C. Chile
D. Paraguay
6. In Brazil, the indigenous population was around 3.5 million before the arrival of Europeans. Today, the indigenous population is around 2 million.
A. 500,000.
B. 200,000.
C. 2 million.
D. 1.5 million.
7. Among the northern Andean countries strongly involved in the illegal coca and drug trade, __________
is now the predominant coca producer.
A. Ecuador
B. Colombia
C. Bolivia
D. Peru

8. In the 1950s, 40 percent of the U.S. workforce was engaged in manufacturing. By the 2000s, fewer than
________ percent of U.S. workers were employed in manufacturing.
A. 15
B. 1
C. 5
D. 7
9. In the post-industrial era, an edge city is a/an
A. complex of warehouses, shopping malls, and offices located along traffic routes.
B. large suburban development mainly occupied by commuters.
C. urbanized development that is an extension of a megalopolis.
D. merger of several residential suburbs into one entity.
10. Which of Canada’s Atlantic Provinces has jurisdiction over mainly uninhabited Labrador?
A. Prince Edward Island
B. Nova Scotia
C. Newfoundland
D. New Brunswick
11. In the Caribbean, Puerto Rico and Jamaica are islands of the
A. Windward Islands.
B. Greater Antilles.
C. Lesser Antilles.
D. Leeward Islands.
12. In the South American Andes, the altiplano between the Cordillera Oriental and the western Cordillera Occidental is widest in
A. Peru.
B. Chile.
C. Ecuador.
D. Bolivia.
13. Immigration currently accounts for about _______ of U.S. population growth.
A. three-quarters
B. a quarter
C. one-third
D. one-half
14. In Mexico, the expression Porfiriato refers to
A. the end of the political dominance of the PRI in July 2000.
B. the revolution of 1911 that overthrew Diaz.
C. any kind of authoritarian political oppression.
D. the oppressive rule of Porfirio Diaz.
15. Which of the following is the primary subsistence crop in Latin America?
A. Beans
B. Potatoes
C. Wheat
D. Corn
16. In the United States, as of 2009, which of the following was the largest and fastest-growing immigrant
A. Eastern Europeans and Russians
B. Western Europeans
C. Asians
D. Hispanics
17. Which of the following is not a leading urban center in Venezuela?
A. Maracaibo
B. Valencia
C. Salvador
D. Caracas
18. Which of the following statements about Southern South America is true?
A. Uruguay has the lowest level of urbanization of any mainland Latin American country.
B. The Argentine economy was devastated by the end of 2001 due to multiple factors.
C. Paraguay is the smallest country of the subregion.
D. Influence of Roman Catholicism has sharply declined in Argentina.
19. To avoid risks associated with tornadoes, lightning, and hurricanes, in the United States you should
steer clear of
A. Nevada.
B. Minnesota.
End of exam
C. Florida.
D. Pennsylvania.
20. Regarding tropical rainforests, the term evapotranspiration refers to the fact that
A. deforestation causes a decline in atmospheric oxygen.
B. the humidity of rain forests can produce local and regional precipitation.
C. deforestation causes a loss of soil fertility due to water evaporation.
D. trees absorb carbon dioxide and “exhale” oxygen.

Question 1
Why is it necessary to consider the learning curve of resources on a project?
A. To estimate labor costs properly
B. To improve project team morale
C. To determine the number of individuals needed for a project
D. Collective bargaining contracts require it

Question 2
The budgeting approach based on the collective judgments of top and middle managers is called:
A. top-down budgeting.
B. bottom-up budgeting.
C. activity budgeting.
D. program budgeting.

Question 3
Which of the following does NOT require further analysis after major risks are identified using scenario analysis?
A. Probabilities of each outcome
B. Expected timing of each outcome
C. Probability of each risk event occuring
D. Expected involvement from the project team

Question 4
A problem with bottom-up budgeting is:
A. individual team members may overstate their budget needs.
B. lack of involvement from the project team.
C. underestimating the project task’s budget requirements.
D. project manager must rely on the accounting department to make special allowances for his/her project.

Question 5
Traditional organizational budgets are typically __________ oriented.
A. program
B. expense
C. activity
D. operationally

Question 6
The name given to the budgeting process that aggregates income and expenditures across projects is:
A. activity-oriented budget.
B. top-down budget.
C. bottom-up budget.
D. program-oriented budget.

Question 7
The first unit requires 10 hours to complete. If the industry uses an 80 percent learning rate, how long should the third unit take?
A. 10 hours
B. 9 hours
C. 8 hours
D. 7.02 hours

Question 8
The first unit required 6 hours. If the industry uses a 90 percent learning rate, how long should the fourth unit take?
A. 6 hours
B. 4.86 hours
C. 3.75 hours
D. 3.34 hours

Question 9
FMEA stands for:
A. Financial Methods and Efficiency Analysis.
B. Failure Modes and Effect Analysis.
C. Full Monetary Expenditure Accrual.
D. Financial Measurement of Expenses Accrued.

Question 10
Which of the following is most closely associated with FMEA?
A. Risk priority number
B. Game theory
C. Expected value
D. Simulation

Question 11
Which of the following is NOT a subprocess associated with risk management?
A. Risk identification
B. Risk measurement
C. Qualitative risk analysis
D. Risk response planning

Question 12
Which of the following is NOT true regarding top-down budgeting?
A. It is based on the collective judgments of top and middle managers.
B. Overall project costs are estimated by top and middle managers and then passed on to the next lower level.
C. The overall budget cost is generally not very accurate.
D. Overlooking small but important tasks can lead to a serious budgetary problem.

Question 13
Which of the following is NOT true regarding bottom-up budgeting?
A. The method tends to be inaccurate in the detailed tasks.
B. The WBS is used to identify the elemental tasks.
C. It is rarely used.
D. It is a good managerial training technique.

Question 14
A task is expected to take 20 hours of labor at $25 per hour. The required material cost is $500, and the organization charges 30% of direct labor for overhead. The total task cost is:
A. $500
B. $1,150
C. $1,250
D. $1,500

Question 15
There is a 30 percent chance that a new product development project will result in sales of $500,000 and a 70 percent chance that the project will result in sales of $100,000. What is the expected value of this project?
A. $220,000
B. $240,000
C. $300,000
D. $320,000

Multiple Choice Answers

1. A major disadvantage of using call options to hedge a short position is that:
hedging increases the risk of loss on the short sale.
the option premium and commission reduce profit potential.
the price of the stock may go up.
None of the above
2. What is the conversion ratio of a $1,000 bond convertible at $27 per share? The coupon rate is 10% and the market rate 12%. This company’s common stock is currently trading at $23 per share.

3. A put is said to be “in-the-money” when the strike price is __________ the market price.
equal to
greater than
less than
may be more than one of the above, depending on the option premium

4. Which of the following statements describes the relationship between the market value, pure bond value, and associated stock price related to a convertible bond?
Both increase as the common stock price increases
Market value approaches the pure bond value as the stock price approaches zero.
As stock price increases, the pure bond value increases.
None of the above

5. The ______ is the issuer of all options listed on the exchanges and is responsible for the liquidity and ease of operation of the options market.
Chicago Board Options Exchange
New York Stock Exchange
Options Clearing Corporation
None of the above

6. The settle price shown in a stock index futures table is the:
highest price the contract hit during the day.
closing price for the contract at the end of the day.
price for the contract only for the last day of the contract.
None of the above

7. The high-risk, speculative nature of commodities futures is due primarily to:
the presence of hedgers in the markets.
high leverage brought about by low margin requirements.
Both A and B
None of the above

8. The profit of an index option is determined by:
the total value of the increase in the index.
the total value of the option.
the size of the premium.
More than one above

9. Which of the following is NOT an advantage of investing in stock index futures for the speculator?
The elimination of unsystematic risk
Manipulation by insiders is less likely than with individual securities
Maximum leverage potential
All of the above are advantages

10. Examples of financial futures include:
foreign exchange and interest rate futures.
gold and foreign currencies.
corporate bonds and common stock.
None of the above