E-Business Management
Final Exam
Course Introduction
E-Business Management explores the strategies, tools, and technologies necessary to operate and manage businesses in the digital environment. The course covers topics such as electronic commerce models, digital marketing, online payment systems, supply chain integration, cybersecurity, and legal and ethical issues in e-business. Students will learn how to evaluate e-business opportunities, develop effective online business strategies, and apply digital solutions to enhance organizational performance. By the end of the course, participants will be equipped with the skills to manage and innovate within the rapidly evolving digital marketplace.
Recommended Textbook Management Information Systems Managing the Digital Firm 6th Canadian Edition by Kenneth
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30 Chapters
2967 Verified Questions
2967 Flashcards
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Page 2
Chapter 1: Why Study Money, banking, and Financial Markets
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) The financial intermediaries that the average person interacts with most frequently are
A)exchanges.
B)over-the-counter markets.
C)finance companies.
D)banks.
Answer: D
Q2) When the total value of final goods and services is calculated using current prices,the resulting measure is referred to as A)real GDP.
B)the GDP deflator.
C)nominal GDP.
D)the index of leading indicators.
Answer: C
Q3) Everything else held constant,a weaker dollar will likely hurt
A)textile exporters in South Carolina.
B)wheat farmers in Montana that sell domestically.
C)automobile manufacturers in Michigan that use domestically produced inputs.
D)furniture importers in California.
Answer: D
Page 3
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Chapter 2: An Overview of the Financial System
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Sample Questions
Q1) An important function of secondary markets is to
A)make it easier to sell financial instruments to raise funds.
B)raise funds for corporations through the sale of securities.
C)make it easier for governments to raise taxes.
D)create a market for newly constructed houses.
Answer: A
Q2) Describe the two methods of organizing a secondary market.
Answer: A secondary market can be organized as an exchange where buyers and sellers meet in one central location to conduct trades.An example of an exchange is the New York Stock Exchange.A secondary market can also be organized as an over-the-counter market.In this type of market,dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices.An example of an over-the-counter market is the federal funds market.
Q3) Prices of money market instruments undergo the least price fluctuations because of
A)the short terms to maturity for the securities.
B)the heavy regulations in the industry.
C)the price ceiling imposed by government regulators.
D)the lack of competition in the market.
Answer: A
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Page 4
Chapter 3: What Is Money
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Sample Questions
Q1) Of the following,the largest is
A)money market deposit accounts.
B)demand deposits.
C)M1.
D)M2.
Answer: D
Q2) Kevin purchasing concert tickets with his debit card is an example of the ________ function of money.
A)medium of exchange
B)unit of account
C)store of value
D)specialization
Answer: A
Q3) As the payments system evolves from barter to a monetary system,
A)commodity money is likely to precede the use of paper currency.
B)transaction costs increase.
C)the number of prices that need to be calculated increase rather dramatically.
D)specialization decreases.
Answer: A
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Page 5
Chapter 4: The Meaning of Interest Rates
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Sample Questions
Q1) In which of the following situations would you prefer to be the borrower?
A)The interest rate is 9 percent and the expected inflation rate is 7 percent.
B)The interest rate is 4 percent and the expected inflation rate is 1 percent.
C)The interest rate is 13 percent and the expected inflation rate is 15 percent.
D)The interest rate is 25 percent and the expected inflation rate is 50 percent.
Q2) A discount bond selling for $15,000 with a face value of $20,000 in one year has a yield to maturity of
A)3 percent.
B)20 percent.
C)25 percent.
D)33.3 percent.
Q3) The interest rate on a consol equals the
A)price times the coupon payment.
B)price divided by the coupon payment.
C)coupon payment plus the price.
D)coupon payment divided by the price.
Q4) If the interest rate is 5%,what is the present value of a security that pays you $1,050 next year and $1,102.50 two years from now? If this security sold for $2200,is the yield to maturity greater or less than 5%? Why?
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Chapter 5: The Behavior of Interest Rates
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Sample Questions
Q1) An increase in the expected rate of inflation will ________ the expected return on bonds relative to the that on ________ assets,everything else held constant.
A)reduce;financial
B)reduce;real
C)raise;financial
D)raise;real
Q2) If the interest rate on a bond is below the equilibrium interest rate,there is an excess ________ of bonds and the bond price will ________.
A)demand;rise B)demand;fall
C)supply;rise D)supply;fall
Q3) When an economy grows out of a recession,normally the demand for bonds ________ and the supply of bonds ________,everything else held constant.
A)increases;increases
B)increases;decreases
C)decreases;decreases
D)decreases;increases
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Chapter 6: The Risk and Term Structure of Interest Rates
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Sample Questions
Q1) A(n)________ in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield on corporate bonds,all else equal.
A)increase;increase;decrease
B)increase;decrease;decrease
C)decrease;increase;increase
D)decrease;decrease;decrease
Q2) A decrease in the riskiness of corporate bonds will ________ the price of corporate bonds and ________ the price of Treasury bonds,everything else held constant.
A)increase;increase
B)reduce;reduce
C)reduce;increase
D)increase;reduce
Q3) When yield curves are steeply upward sloping
A)long-term interest rates are above short-term interest rates.
B)short-term interest rates are above long-term interest rates.
C)short-term interest rates are about the same as long-term interest rates.
D)medium-term interest rates are above both short-term and long-term interest rates.
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Page 8
Chapter
Expectations,
and the Efficient Market Hypothesis
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Sample Questions
Q1) The small-firm effect refers to the
A)negative returns earned by small firms.
B)returns equal to large firms earned by small firms.
C)abnormally high returns earned by small firms.
D)low returns after adjusting for risk earned by small firms.
Q2) In the Gordon growth model,a decrease in the required rate of return on equity
A)increases the current stock price.
B)increases the future stock price.
C)reduces the future stock price.
D)reduces the current stock price.
Q3) Stockholders are residual claimants,meaning that they
A)have the first priority claim on all of a company's assets.
B)are liable for all of a company's debts.
C)will never share in a company's profits.
D)receive the remaining cash flow after all other claims are paid.
Q4) Psychologists have found that people tend to be ________ in their own judgments.
A)underconfident
B)overconfident
C)indecisive
D)insecure
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Chapter 8: An Economic Analysis of Financial Structure
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Sample Questions
Q1) If you default on your auto loan,your car will be repossessed because it has been pledged as ________ for the loan.
A)interest
B)collateral
C)dividend
D)commodity
Q2) Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are TRUE?
A)Stocks are a far more important source of finance than are bonds.
B)Stocks and bonds,combined,supply less than one-half of the external funds.
C)Financial intermediaries are the least important source of external funds for businesses.
D)Since 1970,more than half of the new issues of stock have been sold to American households.
Q3) American businesses get their external funds primarily from A)bank loans.
B)bonds and commercial paper issues.
C)stock issues.
D)loans from nonbank financial intermediaries.
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Page 10
Chapter 9: Banking and the Management of Financial Institutions
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Sample Questions
Q1) All of the following are operating expenses for a bank EXCEPT
A)service charges on deposit accounts.
B)salaries and employee benefits.
C)rent on buildings.
D)servicing costs of equipment such as computers.
Q2) All of the following are examples of off-balance sheet activities that generate fee income for banks EXCEPT
A)foreign exchange trades.
B)guaranteeing debt securities.
C)back-up lines of credit.
D)selling negotiable CDs.
Q3) When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank,then
A)the liabilities of the First National Bank decrease by $10.
B)the reserves of the First National Bank increase by $10.
C)the liabilities of Citibank decrease by $10.
D)the assets of Citibank decrease by $10.
Q4) How can specializing in lending help to reduce the adverse selection problem in lending?
Page 11
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Chapter 10: Economic Analysis of Financial Regulation
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Sample Questions
Q1) When one party to a transaction has incentives to engage in activities detrimental to the other party,there exists a problem of A)moral hazard.
B)split incentives.
C)ex ante shirking.
D)pre-contractual opportunism.
Q2) The collapse of the Bank of Credit and Commerce International,BCCI,showed the difficulty of international banking regulation.BCCI operated in more than ________ countries and was supervised by the small country of ________.
A)70,Luxembourg
B)100,Monaco
C)70,Monaco
D)100,Luxembourg
Q3) Savings and loan regulators allowed S&Ls to include in their capital calculations a high value for intangible capital called A)goodwill.
B)salvation.
C)kindness.
D)retribution.
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Page 12
Chapter 11: Banking Industry: Structure and Competition
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137 Flashcards
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Sample Questions
Q1) Bank consolidation will likely result in
A)less competition.
B)the elimination of community banks.
C)increased competition.
D)a shift in assets from larger banks to smaller banks.
Q2) Which of the following is NOT part of the shadow banking system?
A)the transformer
B)the servicer
C)the bundler
D)the distributor
Q3) A disadvantage of virtual banks (clicks)is that
A)their hours are more limited than physical banks.
B)they are less convenient than physical banks.
C)they are more costly to operate than physical banks.
D)customers worry about the security of on-line transactions.
Q4) What financial innovations helped banks to get around the bank branching restrictions of the McFadden Act?
Q5) Why did the interest rate volatility of the 1970s spur financial innovation?
Q6) Discuss three ways in which U.S.banks can become involved in international banking.
Page 13
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Chapter 12: Financial Crises
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Sample Questions
Q1) ________ is a process of bundling together smaller loans (like mortgages)into standard debt securities.
A)Securitization
B)Origination
C)Debt deflation
D)Distribution
Q2) As "haircuts" increased during 2007-2009,financial institutions found that to borrow the same loan amount now required ________ collateral.
A)less
B)no
C)more
D)default-free
Q3) The Dodd-Frank bill created an agency to monitor markets for asset price bubbles and the buildup of systemic risk.This agency is called the
A)Resolution Trust Authority.
B)Board of Governors.
C)Financial Stability Oversight Council.
D)Macroprudential Supervisory Agency.
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Chapter 13: Central Banks and the Federal Reserve System
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Sample Questions
Q1) The three largest Federal Reserve banks (New York,Chicago,and San Francisco)combined hold more than ________ percent of the assets of the Federal Reserve System.
A)25
B)33
C)50
D)67
Q2) On paper,the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.
A)less;less
B)less;more
C)more;less
D)more;more
Q3) Members of the Board of Governors are
A)chosen by the Federal Reserve Bank presidents.
B)appointed by the newly elected president of the United States,as are cabinet positions.
C)appointed by the president of the United States and confirmed by the Senate.
D)never allowed to serve more than 7-year terms.
Q4) Make the case for and against an independent Federal Reserve.
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Chapter 14: The Money Supply Process
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Sample Questions
Q1) Everything else held constant,if the sum of the required reserve ratio and the excess reserve ratio is less than one,a decrease in the currency-checkable deposit ratio will mean
A)an increase in currency in circulation and an increase in the money supply.
B)an increase in money supply.
C)a decrease in the money supply.
D)an increase in currency in circulation but no change in the money supply.
Q2) When the Fed supplies the banking system with an extra dollar of reserves,deposits increase by more than one dollar-a process called
A)extra deposit creation.
B)multiple deposit creation.
C)expansionary deposit creation.
D)stimulative deposit creation.
Q3) The amount of borrowed reserves is ________ related to the discount rate,and is ________ related to the market interest rate.
A)negatively;negatively
B)negatively;positively
C)positively;negatively
D)positively;positively
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Page 16
Chapter 15: Tools of Monetary Policy
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Sample Questions
Q1) The actual execution of open market operations is done at A)the Board of Governors in Washington,D.C.
B)the Federal Reserve Bank of New York.
C)the Federal Reserve Bank of Philadelphia.
D)the Federal Reserve Bank of Boston.
Q2) Open market purchases ________ reserves and the monetary base thereby ________ the money supply.
A)raise;lowering
B)raise;raising
C)lower;lowering
D)lower;raising
Q3) In the market for reserves,if the federal funds rate is between the discount rate and the interest rate paid on excess reserves,a ________ in the reserve requirement decreases the demand for reserves,________ the federal funds interest rate,everything else held constant.
A)rise;lowering
B)decline;raising
C)decline;lowering
D)rise;raising
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Page 17
Chapter 16: The Conduct of Monetary Policy: Strategy and Tactics
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Sample Questions
Q1) Which of the following is a potential operating instrument for the central bank?
A)the monetary base
B)the M1 money supply
C)nominal GDP
D)the discount rate
Q2) In practice,the Fed's policy of targeting money market conditions in the 1960s proved to be
A)countercyclical,helping to stabilize the economy.
B)procyclical,destabilizing the economy.
C)procyclical,helping to stabilize the economy.
D)countercyclical,destabilizing the economy.
Q3) Which of the following is NOT an operating instrument?
A)nonborrowed reserves
B)monetary base
C)federal funds interest rate
D)discount rate
Q4) Explain the Taylor rule,including the formula for setting the federal funds rate target,and the components of the formula.If the Fed were to use this rule,how many goals would it use to set monetary policy?
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Chapter 17: The Foreign Exchange Market
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Sample Questions
Q1) When the value of the British pound changes from $1.50 to $1.25,then the pound has ________ and the U.S.dollar has ________.
A)appreciated;appreciated
B)depreciated;appreciated
C)appreciated;depreciated
D)depreciated;depreciated
Q2) If the U.S.dollar appreciates from 1.25 Swiss franc per U.S.dollar to 1.5 francs per dollar,then the franc depreciates from ________ U.S.dollars per franc to ________ U.S.dollars per franc.
A)0.80;0.67
B)0.67;0.80
C)0.50;0.33
D)0.33;0.50
Q3) ________ in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to appreciate,everything else held constant.
A)An increase;increase
B)An increase;decrease
C)A decrease;increase
D)A decrease;decrease
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Page 19
Chapter 18: The International Financial System
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Sample Questions
Q1) Hong Kong chooses to have ________ and ________ and therefore,cannot have an independent monetary policy at the same time.
A)capital control;a fixed exchange rate
B)free capital mobility;a fixed exchange rate
C)free capital mobility;a flexible exchange rate
D)capital control;a flexible exchange rate
Q2) Under exchange-rate targeting,the central bank in the targeting country ________ lose the ability to pursue its own independent monetary policy and any shocks to the anchor country is ________ transmitted to the targeting country.
A)does;directly
B)does not;directly
C)does;not directly
D)does not;not directly
Q3) The seignorage for a government is greater for ________ than for ________.
A)dollarization;a currency board
B)dollarization;exchange-rate targeting
C)dollarization;monetary targeting
D)dollarization;inflation targeting
E)exchange-rate targeting;dollarization
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Page 20
Chapter 19: Quantity Theory, inflation, and the Demand for Money
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Sample Questions
Q1) The speculative motive for holding money is closely tied to what function of money?
A)store of wealth
B)unit of account
C)medium of exchange
D)standard of deferred payment
Q2) If the government finances its spending by issuing debt to the public,the monetary base will ________ and the money supply will ________.
A)increase;increase
B)increase;decrease
C)decrease;increase
D)not change;not change
Q3) The Baumol-Tobin analysis suggests that
A)velocity is relatively constant.
B)the transactions component of the demand for money is negatively related to the level of interest rates.
C)the speculative motive is nonexistent.
D)velocity is unrelated to the transactions motive.
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Page 21
Chapter 20: The Is Curve
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Sample Questions
Q1) Using the information in situation 20-2,if government increases their spending by $50 and increases net taxes by 50,then equilibrium aggregate output will change by A)-$100.
B)-$50.
C)$50.
D)$100.
Q2) An autonomous depreciation of the U.S.dollar makes American goods ________ relative to foreign goods and results in a ________ in U.S.net exports,everything else held constant.
A)cheaper;decline B)cheaper;rise
C)more expensive;decline D)more expensive;rise
Q3) If aggregated demand is less than actual output,unplanned inventory ________ will cause output to ________.
A)accumulation;rise B)depletion;fall
C)depletion;rise
D)accumulation;fall
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Page 22
Chapter 21: The Monetary Policy and Aggregate Demand
Curves
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Sample Questions
Q1) The Fed's policy actions of reacting to higher inflation by raising the real interest rate during 2004-2006 were
A)upward movements along the monetary policy curve.
B)downward movement along the monetary policy curve.
C)upward shifts of the monetary policy curve.
D)downward shifts of the monetary policy curve.
Q2) Everything else held constant,an increase in autonomous consumer spending will cause the IS curve to shift to the ________ and aggregate demand will ________.
A)right;increase
B)right;decrease
C)left;increase
D)left;decrease
Q3) Everything else held constant,an appreciation of the domestic currency will cause the IS curve to shift to the ________ and aggregate demand will ________.
A)right;increase
B)right;decrease
C)left;increase
D)left;decrease
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Chapter 22: Aggregate Demand and Supply Analysis
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Sample Questions
Q1) Which of the followings does NOT shift the short-run aggregate supply curve?
A)supply shocks.
B)persistent positive output gap.
C)changes in expected inflation.
D)an increase in output gap.
Q2) Everything else held constant,a decrease in government spending ________ aggregate ________.
A)increases;demand B)decreases;demand
C)decreases;supply D)increases;supply
Q3) According to aggregate demand and supply analysis,the rising oil prices coupled with the global financial crisis in 2007-2008 caused the unemployment rate to ________ and the level of real aggregate output to ________.
A)increase;increase
B)increase;decrease
C)decrease;increase
D)decrease;decrease
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24
Chapter 23: Monetary Policy Theory
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Sample Questions
Q1) The legislative lag represents
A)the time it takes for policy makers to obtain data indicating what is happening in the economy.
B)the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy.
C)the time it takes to pass legislation to implement a particular policy.
D)the time it takes for policy makers to change policy instruments once they have decided on the new policy.
E)the time it takes for the policy actually to have an impact on the economy.
Q2) The disruption to financial markets starting in August 2007 that caused both consumer and business spending to fall
A)shifted the aggregate demand curve to the right.
B)shifted the aggregate demand curve to the left.
C)shifted the aggregate supply curve to the right.
D)shifted the aggregate supply curve to the left.
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Chapter 24: The Role of Expectations in Monetary Policy
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Sample Questions
Q1) Potential weaknesses of nominal GDP targeting include
A)it requires accurate estimates of potential GDP growth,which are not easy to achieve.
B)real GDP growth that is below potential or inflation that is below the inflation objective will encourage more expansionary monetary policy.
C)it is more complicated to explain to the public than inflation targeting and thus the public might be confused about the objectives of the central bank.
D)both A and C.
Q2) The argument that econometric policy evaluation is likely to be misleading if policymakers assume stable economic relationships is known as
A)the monetarist revolution.
B)the Lucas critique.
C)public choice theory.
D)new Keynesian theory.
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26
Chapter 25: Transmission Mechanisms of Monetary Policy
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Sample Questions
Q1) Tobin's q is defined as the market value of firms ________ the replacement cost of capital.
A)times
B)minus
C)plus
D)divided by
Q2) Tobin's q theory suggests that monetary policy may affect investment spending through its impact on A)stock prices.
B)interest rates. C)bond prices. D)cash flow.
Q3) According to Tobin's q theory,when equity prices are low the market price of existing capital is ________ relative to new capital,so expenditure on fixed investment is
A)cheap;low
B)dear;low
C)cheap;high
D)dear;high
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Page 27
Chapter 26: Web 1:financial Crises in Emerging Market
Economies
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Sample Questions
Q1) The chaebols encouraged the Korean government to open up Korean financial markets to foreign capital.The Korean government responded by
A)allowing unlimited short-term foreign borrowing but maintained quantity restrictions on long-term foreign borrowing by financial institutions.
B)allowing unlimited short-term and long-term foreign borrowing by financial institutions.
C)maintaining quantity restrictions on short-term foreign borrowing but allowing unlimited long-term foreign borrowing by financial institutions.
D)not allowing any foreign borrowing by financial institutions.
Q2) Severe fiscal imbalances can directly trigger a currency crisis since
A)investors fear that the government may not be able to pay back the debt and so begin to sell domestic currency.
B)the government may stop printing money.
C)the government may have to cut back on spending.
D)the currency must surely increase in value.
Q3) What two key factors trigger speculative attacks leading to currency cries in emerging market countries?
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Page 28
Chapter 27: Web 2:the Islm Model
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Sample Questions
Q1) In the ISLM framework,an expansionary monetary policy causes aggregate output to ________ and the interest rate to ________,everything else held constant.
A)increase;increase
B)increase;decrease
C)decrease;decrease
D)decrease;increase
Q2) An increase in the quantity of money supplied shifts the money supply curve to the ________ and the LM curve to the ________,everything else held constant.
A)right;left
B)right;right
C)left;left
D)left;right
Q3) Which of the followings does NOT describe the goods market in the ISLM model?
A)consumption function
B)investment function
C)government spending and tax
D)money demand function
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Chapter 28: Web 3:nonbank Finance
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Sample Questions
Q1) In financial markets an IPO is an
A)investment portfolio option.
B)initial public offering.
C)initial portfolio offering.
D)investment portfolio offering.
Q2) ________ assume the risk of issuing a new stock in the hope of earning profits on its sale.
A)Stock brokers
B)Securities dealers
C)Underwriters
D)Stock speculators
E)Reinsurers
Q3) Explain why the Social Security system faces problems.Discuss the possible solutions to these problems.
Q4) The government corporation that insures pension benefits is
A)Fannie Mae.
B)Ginnie Mae.
C)Penny Benny.
D)Sallie Mae.
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Chapter 29: Web 4:financial Derivatives
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Sample Questions
Q1) If you bought a long futures contract you hope that bond prices
A)rise.
B)fall.
C)are stable.
D)fluctuate.
Q2) By taking the long position on a futures contract of $100,000 at a price of 115 you are agreeing to ________ a ________ face value security for ________.
A)sell;$100,000;$115,000.
B)sell;$115,000;$100,000.
C)buy;$100,000;$115,000.
D)buy;$115,000;$100,000.
Q3) An option that gives the owner the right to buy a financial instrument at the exercise price within a specified period of time is a A)call option.
B)put option.
C)American option.
D)European option.
Q4) Explain the margin requirement for financial futures and how marking to market affects the margin account.
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Chapter 30: Web 5:conflicts of Interest in the Financial
Services Industry
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Sample Questions
Q1) When financial institutions are able to reduce the costs of information for each service they offer by applying the same information source to each service,we say that the financial institution is realizing
A)economies of scope.
B)economies of scale.
C)increasing returns.
D)diminishing marginal returns.
Q2) Under the Global Legal Settlement of 2002,the provision that requires investment banking firms to sever the link between underwriting and research is an example of A)regulate for transparency.
B)supervisory oversight.
C)separation of functions.
D)socialization of information production.
Q3) Which policy measure bans spinning?
A)Sarbanes-Oxley Act of 2002
B)Global Legal Settlement of 2002
C)Gramm-Leach-Bliley Act of 1999
D)Riegle-Neal Act of 1994
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