QUESTION 26 Desmond, a stockbroker for a large firm, sells shares in a mutual fu

Question

QUESTION 26

Desmond, a stockbroker for a large firm, sells shares in a mutual fund by describing the large returns earned when the fund was investing in a different mix of companies. He omits this information and also does not discuss the potential risks of investing in the fund. This situation is an example of:

Churning

Diversification

Deception

Unsuitability

3 points   

QUESTION 27

Orange, a clothing manufacturer, has a factory in Honduras. Orange pays the local legal minimum wage to its employees, but there are many protests. What is the likely cause for the protests against this practice?

A legal minimum wage is discriminatory toward women.

A legal minimum wage attracts children as employees.

A legal minimum wage may not be locally appropriate.

A legal minimum wage is not a living wage.

3 points   

QUESTION 28

Lisa fails to make her sales goals for the year due to extensive absences and a lack of work ethic. According to the Model Employment Termination Act, Lisa’s conduct is an example of

Due process

Good faith

Due diligence

Good cause

3 points   

QUESTION 29

A wildlife refuge advertises its mission during the local news, hoping to generate more donations to support the animals. This situation is an example of

Social advertising

Irrational persuasion

Native advertising

Audience profiling

3 points   

QUESTION 30

After a set of toy jewelry is found to contain lead, the Consumer Product Safety Commission issues a recall and bans the sale of the product in the United States. This situation is an example of which ethical concept regarding marketing?

Freedom

Justice

Well-being

Fairness

3 points   

QUESTION 31

Sunburst coffee offers competitive wages and has found that this reduces employee turnover, thus maximizing profits. It has employed the exact number of people necessary to make the most money. This situation is an example of wages

Distributed out of proportion to one’s contribution.

Set at the market-clearing price.

That are determined by the market and therefore are just.

That exceed the marginal product of labor.

3 points   

QUESTION 32

Fun Toys 4 U and Castle Toys are competitors. The CEO’s of both companies meet and agree to sell their products in different areas of the country to avoid competition. This situation is an example of:

Resale price maintenance

Price-fixing

Predatory pricing

Price discrimination

3 points   

QUESTION 33

Apple has been accused of designing the IPhone

Without regard for environmental harm

Without concern for its safety

With planned obsolescence

With the intention of deceiving customers

3 points   

QUESTION 34

Although bonds are a better match for her client’s investment strategy, Frannie convinces the client to buy stocks. This situation is an example of:

Deception

Churning

Unsuitability

Fraud

Churning

Diversification

Deception

Unsuitability

Explanation / Answer

26. Answer- c. Deception. Deception involves false or misleading claims, while manipulation shapes perceptions. In the above example, Aziz omits the information and also does not discuss the potential risks of investing in the fund. Hence, this is an example of Deception.

27. Answer- d. A legal minimum wage is not a living wage. The company is providing the legal minimum wage but not wages which are sufficient for the workers to make their livelihood. Hence, the workers have started protesting against this practice as the legal minimum wage is not enough for their living.

28. Answer- d. Good cause. Good cause is carefully defined in META.  Basically, it can be one of two things.  The employee's own inadequate or improper conduct in the per­formance of the job is one kind of good cause. The second involves the economic or insti­tutional goals of the employer.  If these goals require reorgan­izations, discontinuing func­tions, and changing the size and character of its work force, employees discharged as a result are discharged with good cause.

29. Answer- a. Social advertising. Social advertising is advertising that relies on social information or networks in generating, targeting, and delivering marketing communications. Because the company has used local news as a medium to advertise its mission, this is an example of social advertising.

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