You can calculate an NPV, do a Five Forces analysis, and spell "heteroscedasticity." But these days, you have to know a lot more than that if you want to make it through your next round of golf without appearing hopelessly out of touch. Think you know business? We'll be the judge of that--right after you answer the next 27 questions.
No doodling.
1 In which of the following is Dick Cheney not implicated?
a) Using Halliburton money to refurnish his office at the White House
b) Overstating Halliburton revenue by $100 million
c) Doing $73 million worth of post-Gulf War business with Saddam Hussein
d) Overseeing Halliburton's overbilling of the Pentagon, which led to $2 million in fines
2 Match each whistle-blower with her organization:
Sherron Watkins
Cynthia Cooper
Coleen Rowley
Noreen Harrington
Stern Asset Management
FBI
Enron
WorldCom
3 How much shareholder money did former Tyco CEO Dennis Kozlowski spend on a home shower curtain?
a) $52
b) $450
c) $1,200
d) $6,000
4 True or false:
Deflation is a reduction in inflation.
5 How many stocks comprise the Wilshire 5000?
a) 4,492
b) 5,000
c) 5,436
d) 6,307
6 Women make up about half the labor force. How many Fortune 500 companies have female presidents or CEOs?
a) 8
b) 2
c) 29
d) none
7 Which of the following apply to Standard Oil, targeted in 1901 in the biggest antitrust case up to that time, and which apply to Microsoft, accused of antitrust violations in 1999, or both?
a) At the height of the case, the company's founder owned one-third of company stock.
b) The government spent $12.6 million pressing the antitrust case.
c) The company had an estimated 90 percent market share at the time of the case.
d) The company lists as one of its governing rules: "Keep your mouth closed, as silence is gold, and gold is what we exist for."
e) A competitor said of the company: "I've seen grown men quake when considering doing things that might displease [company name]."
8 In seeking a more reliable gauge than operating earnings--which can easily be manipulated to improve a company's bottom line--Standard & Poor's developed what earnings measure in 2002?
a) pro forma earnings
b) reported earnings
c) core earnings
d) EBITDA
9 How much more does it cost companies to acquire customers than retain them, according to The Gallup Organization?
a) zero; they spend more to retain them
b) zero; they spend equally on acquiring and retaining customers
c) two to six times more
d) eight to 10 times more
10 Seventy percent of workers who leave their jobs say the main reason for quitting is:
a) they're seeking higher pay.
b) they hate their boss.
c) too little opportunity for advancement.
d) to try out for The Apprentice.
11 During the Great Depression, the stock market plummeted 89 percent from its 1929 peak. In what year did it again reach its 1929 high?
a) 1939
b) 1945
c) 1954
d) 1969
12 Martha Stewart, whose personal wealth in 2001 was estimated at $600 million, may sit in prison for at least a year for lying to investigators about a stock trade she made that year that saved her how much in losses?
a) $51,000
b) $510,000
c) $872 million
d) about $1.2 million
13 In 1999, Carly Fiorina told BusinessWeek that one of the hardest things she ever did was:
a) break it to her father that she was dropping out of law school.
b) decide between a corporate career and opening a knitting shop.
c) convince regulators in 2002 that the merger between Hewlett-Packard and Compaq was not anticompetitive, then win stockholder approval.
d) approve 15,000 pink slips for HP and Compaq employees laid off as a result of the merger.
14 Jack Grubman, the former $20-million-a-year telecom analyst who left Salomon Smith Barney in disgrace after giving glowing reports on troubled companies (some on the brink of bankruptcy), is now:
a) writing an autobiography for a $2 million advance.
b) working as a strategic consultant for a software developer.
c) getting his undergraduate college degree.
d) teaching ethics at his son's high school.
15 Name the seminal 1936 work by the 20th century's most influential economist, John Maynard Keynes.
16 Complete the following sentiment of Alexander Zelaznick, Harvard Business School psychology professor emeritus, as expressed to the New York Times in 1986: "To understand the entrepreneur . . . "
a) ". . . you have to understand his relationship with authority figures."
b) ". . . you have to be an entrepreneur yourself."
c) ". . . you first have to understand the psychology of the juvenile delinquent."
d) ". . . look in the mirror. Everyone, at heart, is an entrepreneur."
17 Applicants for the reality show The Apprentice were asked which question during the interview process?
a) Would you shine Donald Trump's shoes if asked?
b) What is your net worth?
c) Do you have any tattoos or body piercings?
d) What do you think of Donald Trump's hairstyle, and how would you improve it?
18 What five companies worldwide sales are most driven by their brand names, according to an annual study by Interbrand, a consulting company:
General Motors?
Coca-Cola
PepsiCo
IBM
Intel
Nike
Dell
L'Oréal
Microsoft
GE
19 How much does it cost the U.S. Mint to produce a penny?
a) a nickel
b) two cents
c) 0.98 cents
d) nothing
20 Match the industry with the average CEO-compensation package:
Utilities
Financial
Healthcare
Telecommunications
$9.8 million
$11.7 million
$18.3 million
$4.8 million
21 Let's say a Xerox copy machine costs $1,000, plus three cents per copy to operate. An IBM machine costs $800, plus four cents per copy. Clearly, the IBM machine costs less up front. How many copies would you have to make before the Xerox machine becomes the more cost-effective choice?
22 What happened under a buttonwood tree at 68 Wall Street?
a) Dutch Shipping Co. employees first traded with the Manhattes Indians.
b) Alexander Hamilton "stumped" for the first national banking system.
c) Former Internet analyst Henry Blodget played a game of chess after getting fired from Merrill Lynch.
d) Twenty-four brokers met to form the first stock exchange in America.
23 Which of the following highest-paid CEOs graduated from college?
a) Lawrence Ellison of Oracle
b) Michael Dell of Dell Computer
c) Jozef Strauss of JDS Uniphase
d) Steve Jobs of Apple Computer
24 Who was the highest-paid executive in 2003?
a) Jeffrey C. Barbakow of Tenet Healthcare
b) Bill Gates of Microsoft
c) John T. Chambers of Cisco
d) Irvin Jacobs of Qualcomm
25 What four companies bumped Chevron, Goodyear, Sears, and Union Carbide from the Dow Jones Industrial Average in 1999?
Merrill Lynch
Levi Strauss & Co.
Microsoft
Home Depot
SBC Communications
Starbucks Corp.
Target
Intel Corporation
26 Wal-Mart's special company cheer (performed by employees at certain meetings) includes a:
a) hip shake.
b) hug for the person next to you.
c) high five.
d) ferret.
27 What percent of Enron's $1.785 billion pretax profits recorded between 1996 and 2000 were paid in federal taxes?
a) -21
b) 0
c) 15
d) 35
So, how'd you do? More important, how'd you do compared to the guy next to you? It's time to tally up your score, which will, in effect, determine how successful you'll be for the rest of your working life.
The All Knowing Answer Key
1. a
2. One point for each correct pairing:
Sherron Watkins--Enron
Cynthia Cooper--WorldCom
Coleen Rowley--FBI
Noreen Harrington--Stern Asset Management
3. d
4. False. Deflation is a decrease in the money supply.
5. d
6. a
Hewlett-Packard (Carleton S. Fiorina)
Xerox (Anne M. Mulcahy)
Rite Aid Corporation (Mary Sammons)
Lucent (Patricia F. Russo)
Mirant (S. Marce Fuller)
Avon Products (Andrea Jung)
Pathmark Stores (Eileen Scott)
Golden West Financial Corporation (Marion O. Sandler)
7. One point for each correct answer.
a--Standard Oil
b--Microsoft
c--Standard Oil and Microsoft
d--Standard Oil
e--Microsoft
8. c
The calculation for core earnings requires companies to treat stock options as expenses, exclude gains and losses from pension plans, and exclude gains and losses from the sales of assets that aren't part of the company's core business.
9. c
10. b
11. c
12. a
13. a
14. b
15. General Theory on Employment, Interest, and Money
16. c
17. c
18. One point for each correct answer.
Coca-Cola, Microsoft, IBM, GE, Intel (Study published in BusinessWeek)
19. c
20. One point for each correct match.
Utilities--$4.8 million
Financial--$9.8 million
Health care--$11.7 million
Telecommunications--$18.3 million
21. 20,000 (Source: MBA in a Nutshell, by Dr. Milo Sobel, Aspen, 2001)
22. d
23. c
Strauss graduated from the University of Alberta in 1969.
24. a
Barbakow made $116.7 million in 2003.
25. One point for each correct answer.
Intel, Microsoft, Home Depot, SBC Communications
26. a
27. a
The company got a $381 million refund during that period.
Total Possible Points: 44
Scoring Key
41-44
Congratulations! You're well-read, inquisitive, intelligent, and headed for great things. Either that, or you cheated.
31-40
You're not in the corporate office quite yet, but you're right down the hall. Very impressive.
21-30
Your business knowledge will sustain you through mild water-cooler banter, but if you ever want to be cutting deals on the back nine, study up.
20 or below
Might wanna rethink this whole business-career thing. You probably think Warren Buffett sings "Cheeseburger in Paradise."
