ETS MAJOR FIELD TEST (MFT) MBA | MASTER OF BUSINESS
ADMINISTRATION PRACTICE QUESTIONS AND COMPREHENSIVE EXAM
REVIEW
1. major segmentation variables (4): (1) geographic, (2) demographic, (3) psychographic, (4)
behavioral
2. penetrated market: set of customers who are buying the company's product
3. target market: qualified available market the company decides to pursue
4. available market: set of consumers who have interest, income, and access to a particular otter
5. potential market: set of consumer with a suflcient level of interest in a market otter
6. corporate culture: shared experiences, stories, beliefs, & norms that characterize an organization
7. strategic marketing plan: lays out the target market and the firm's value proposition, based on an
analysis of the best market opportunities
8. 5 stages of consumer buying process decision process: (1) need recognition, (2)
information search, (3) evaluation of alternatives, (4) purchase decision, (5) post-purchase behavior
9. 8 steps of business purchasing process: (1) identify need, (2) select specific product, (3)
appoint purchase team, (4) specify technicalities, (5) budget for purchase, (6) research potential suppliers, (7) solicit
bids, (8) award contracts
10. 4 factors influencing consumer behavior: (1) cultural, (2) social, (3) personal, (4) psycho-
logical
11. 4 factors that influence business purchasing behavior: (1) environmental, (2) orga-
nizational, (3) interpersonal, (4) individual
12. competitive intelligence: defining, gathering, analyzing, & distributing intelligence about products,
customers, competitors, and any aspects of the environment needed to support executives & managers making
strategic decisions for an organization
13. managerial decision making process steps (6): (1) establish the objective, (2) define the
problem, (3) identify possible solutions, (4) evaluate alternative courses of action, (5) implement the decision, (6)
acquire feedback
14. 8 major models of marketing communication: (1) advertising, (2) sales promotion,
(3) events & experiences, (4) public relations & publicity, (5) direct marketing, (6) interactive marketing, (7)
word-of-mouth marketing, (8) personal selling
15. pull strategy: the manufacturer uses advertising and other communication to persuade consumers to
demand the product from intermediaries, thus inducing intermediaries to order it
16. push strategy: uses the manufacturer's sales force, trade promotion money, or other means to induce
intermediaries to carry, promote, & sell the product to end users
, ETS MAJOR FIELD TEST (MFT) MBA | MASTER OF BUSINESS
ADMINISTRATION PRACTICE QUESTIONS AND COMPREHENSIVE EXAM
REVIEW
17. points-of-parity (POPs): attributes or benefit associations that are not necessarily unique to the brand
but may be shared with other brands
18. points-of-difference (PODs): attributes of benefits that consumers strongly associate with a brand,
positively evaluate, and believe they could NOT find to the same extent with a competitive brand
19. posititioning: the act of designing a company's ottering and image to occupy a distinctive place in the
minds of the target market
20. supersegment: set of segments sharing some exploitable similarity
21. 5 key criteria market segments must rate favorably on to be useful: (1)
measurable, (2) sustainable, (3) accessible, (4) ditterentiable, (5) actionable
22. pyschographic: the science of using psychology & demographics to better understand consumers
23. variables of demographic segmentation (6): (1) age and life-cycle stage, (2) life stage, (3)
gender, (4) income, (5) generation, (6) race & culture
24. investment banking: a specific division of banking related to the creation of capital for other companies,
governments, and entities
25. weak form: assumes that all info contained in past price movements is reflected in the current market price.
info about recent trends in a stock price is no use in selecting a stock
26. semi-strong form: states the current market price reflects all publicly available information. to gain
abnormal returns insider info is needed
27. information efficiency: all relevant information about a stock is reflected in its price (this is in a perfect
world)
28. strong form efficient: all info -- public and insider -- is reflected in the market price. no abnormal
returns
29. market efficiency: the degree to which stock prices reflect all available relevant information
30. money market: a segment of the financial market in which financial instruments with high liquidity and
very short maturities are traded
31. capital markets: markets for buying and selling equity and debt instruments
32. security: a financial instrument that represents an ownership in a publicly-traded corporation (stock), a
creditor relationship with governmental body or corporation (bond) or rights to an ownership as represented by
an option
33. most common underlying assets of derivatives: stocks, bonds, commodities, currencies,
interest rates, market indexes
, ETS MAJOR FIELD TEST (MFT) MBA | MASTER OF BUSINESS
ADMINISTRATION PRACTICE QUESTIONS AND COMPREHENSIVE EXAM
REVIEW
34. derivative: a security with a price that is dependent upon or derived from one or more underlying assets.
its value is determined by fluctuations in the underlying assets
35. futures: financial contracts obligating the buyer to purchase an asset (or the seller to sell an asset) at a
predetermined future date and price
36. option: a financial derivative that represents a contract sold by one party (option writer) to another party
(option holder). the contract otters the buyer the right to call or put a security at an agreed upon price (strike price)
during a certain period of time or on the exercise date
37. 2 types of financial instruments: (1) cash instruments, (2) derivative instruments
38. financial instruments: assets that can be traded
39. INVENTORY TURNOVER =: SALES/INVENTORY
40. AVERAGE COLLECTION PERIOD =: DAYS (ACCOUNTS RECEIVABLE)/CREDIT SALES
41. WORKING CAPITAL RATIO=: CURRENT ASSETS/CURRENT LIABILITIES
42. working capital managment: a company's managerial accounting strategy designed to monitor
and utilize the 2 component of working capital -- current assets and current liabilities
43. 3 main dividend policies: (1) residual dividend policy, (2) dividend stability policy, (3) hybrid dividend
policy
44. dividend policy: a set of guidelines a company uses to decide how much of its earnings it will pay out to
shareholders
45. WACC =: WdRd(1=T) + WpsRps + WsRs
46. cost of capital: the opportunity cost of making a certain investment
47. capital budgeting: the whole process of analyzing projects and deciding whether they should be
included in the planned expenditures on fixed assets
48. what are some types of real options?: (1) investment timing options, (2) growth options, (3)
abandonment options, (4) flexibility options
49. real options: exist when managers can influence the size and risk of a project's cash flows by taking ditterent
actions during the project's life in response to changing market conditions
50. what 3 types of risk are relevant in capital budgeting?: (1) stand alone risk, (2)
corporate risk, (3) market [beta] risk
51. steps in capital budgeting: (1) estimate cash flows, (2) assess risk of cash flows, (3) determine r
[WACC], (4) evaluate cash flows
52. THE DUPONT EQUATION: (1) ROA = [NY/SALES] [SALES/TA] = NY/TA
(2) ROE = [NY/TA] [TA/EQUITY] = NY/EQUITY
ADMINISTRATION PRACTICE QUESTIONS AND COMPREHENSIVE EXAM
REVIEW
1. major segmentation variables (4): (1) geographic, (2) demographic, (3) psychographic, (4)
behavioral
2. penetrated market: set of customers who are buying the company's product
3. target market: qualified available market the company decides to pursue
4. available market: set of consumers who have interest, income, and access to a particular otter
5. potential market: set of consumer with a suflcient level of interest in a market otter
6. corporate culture: shared experiences, stories, beliefs, & norms that characterize an organization
7. strategic marketing plan: lays out the target market and the firm's value proposition, based on an
analysis of the best market opportunities
8. 5 stages of consumer buying process decision process: (1) need recognition, (2)
information search, (3) evaluation of alternatives, (4) purchase decision, (5) post-purchase behavior
9. 8 steps of business purchasing process: (1) identify need, (2) select specific product, (3)
appoint purchase team, (4) specify technicalities, (5) budget for purchase, (6) research potential suppliers, (7) solicit
bids, (8) award contracts
10. 4 factors influencing consumer behavior: (1) cultural, (2) social, (3) personal, (4) psycho-
logical
11. 4 factors that influence business purchasing behavior: (1) environmental, (2) orga-
nizational, (3) interpersonal, (4) individual
12. competitive intelligence: defining, gathering, analyzing, & distributing intelligence about products,
customers, competitors, and any aspects of the environment needed to support executives & managers making
strategic decisions for an organization
13. managerial decision making process steps (6): (1) establish the objective, (2) define the
problem, (3) identify possible solutions, (4) evaluate alternative courses of action, (5) implement the decision, (6)
acquire feedback
14. 8 major models of marketing communication: (1) advertising, (2) sales promotion,
(3) events & experiences, (4) public relations & publicity, (5) direct marketing, (6) interactive marketing, (7)
word-of-mouth marketing, (8) personal selling
15. pull strategy: the manufacturer uses advertising and other communication to persuade consumers to
demand the product from intermediaries, thus inducing intermediaries to order it
16. push strategy: uses the manufacturer's sales force, trade promotion money, or other means to induce
intermediaries to carry, promote, & sell the product to end users
, ETS MAJOR FIELD TEST (MFT) MBA | MASTER OF BUSINESS
ADMINISTRATION PRACTICE QUESTIONS AND COMPREHENSIVE EXAM
REVIEW
17. points-of-parity (POPs): attributes or benefit associations that are not necessarily unique to the brand
but may be shared with other brands
18. points-of-difference (PODs): attributes of benefits that consumers strongly associate with a brand,
positively evaluate, and believe they could NOT find to the same extent with a competitive brand
19. posititioning: the act of designing a company's ottering and image to occupy a distinctive place in the
minds of the target market
20. supersegment: set of segments sharing some exploitable similarity
21. 5 key criteria market segments must rate favorably on to be useful: (1)
measurable, (2) sustainable, (3) accessible, (4) ditterentiable, (5) actionable
22. pyschographic: the science of using psychology & demographics to better understand consumers
23. variables of demographic segmentation (6): (1) age and life-cycle stage, (2) life stage, (3)
gender, (4) income, (5) generation, (6) race & culture
24. investment banking: a specific division of banking related to the creation of capital for other companies,
governments, and entities
25. weak form: assumes that all info contained in past price movements is reflected in the current market price.
info about recent trends in a stock price is no use in selecting a stock
26. semi-strong form: states the current market price reflects all publicly available information. to gain
abnormal returns insider info is needed
27. information efficiency: all relevant information about a stock is reflected in its price (this is in a perfect
world)
28. strong form efficient: all info -- public and insider -- is reflected in the market price. no abnormal
returns
29. market efficiency: the degree to which stock prices reflect all available relevant information
30. money market: a segment of the financial market in which financial instruments with high liquidity and
very short maturities are traded
31. capital markets: markets for buying and selling equity and debt instruments
32. security: a financial instrument that represents an ownership in a publicly-traded corporation (stock), a
creditor relationship with governmental body or corporation (bond) or rights to an ownership as represented by
an option
33. most common underlying assets of derivatives: stocks, bonds, commodities, currencies,
interest rates, market indexes
, ETS MAJOR FIELD TEST (MFT) MBA | MASTER OF BUSINESS
ADMINISTRATION PRACTICE QUESTIONS AND COMPREHENSIVE EXAM
REVIEW
34. derivative: a security with a price that is dependent upon or derived from one or more underlying assets.
its value is determined by fluctuations in the underlying assets
35. futures: financial contracts obligating the buyer to purchase an asset (or the seller to sell an asset) at a
predetermined future date and price
36. option: a financial derivative that represents a contract sold by one party (option writer) to another party
(option holder). the contract otters the buyer the right to call or put a security at an agreed upon price (strike price)
during a certain period of time or on the exercise date
37. 2 types of financial instruments: (1) cash instruments, (2) derivative instruments
38. financial instruments: assets that can be traded
39. INVENTORY TURNOVER =: SALES/INVENTORY
40. AVERAGE COLLECTION PERIOD =: DAYS (ACCOUNTS RECEIVABLE)/CREDIT SALES
41. WORKING CAPITAL RATIO=: CURRENT ASSETS/CURRENT LIABILITIES
42. working capital managment: a company's managerial accounting strategy designed to monitor
and utilize the 2 component of working capital -- current assets and current liabilities
43. 3 main dividend policies: (1) residual dividend policy, (2) dividend stability policy, (3) hybrid dividend
policy
44. dividend policy: a set of guidelines a company uses to decide how much of its earnings it will pay out to
shareholders
45. WACC =: WdRd(1=T) + WpsRps + WsRs
46. cost of capital: the opportunity cost of making a certain investment
47. capital budgeting: the whole process of analyzing projects and deciding whether they should be
included in the planned expenditures on fixed assets
48. what are some types of real options?: (1) investment timing options, (2) growth options, (3)
abandonment options, (4) flexibility options
49. real options: exist when managers can influence the size and risk of a project's cash flows by taking ditterent
actions during the project's life in response to changing market conditions
50. what 3 types of risk are relevant in capital budgeting?: (1) stand alone risk, (2)
corporate risk, (3) market [beta] risk
51. steps in capital budgeting: (1) estimate cash flows, (2) assess risk of cash flows, (3) determine r
[WACC], (4) evaluate cash flows
52. THE DUPONT EQUATION: (1) ROA = [NY/SALES] [SALES/TA] = NY/TA
(2) ROE = [NY/TA] [TA/EQUITY] = NY/EQUITY
