GMS 200 Class 10 (Chapter 6) Practice Test M/C

Flashcards mode only. For learn/test use flashcards only and only answer with definition.

1. is one of the personality characteristics commonly found among entrepreneurs.
   a. External locus of control
   b. Inflexibility
   c. Self-confidence
   d. Low self-reliance

c. Self-confidence

2. When an entrepreneur is comfortable with uncertainty and willing to take risks, these are indicators of someone with a(n) .
   a. high tolerance for ambiguity
   b. internal locus of control
   c. need for achievement
   d. action orientation

a. high tolerance for ambiguity

3. For entrepreneurs, what is a new form of venture capitalization ?
   a. Crowdfunding
   b. Business plan competitions
   c. Business incubation
   d. Debt financing

b. Business plan competitions

4. When a business owner sells to another person the right to operate that business in another location, this is a business form known as a .
   a. conglomerate
   b. franchise
   c. joint venture
   d. limited partnership

b. franchise

5. A small business owner who is concerned about passing the business on to heirs after retirement or death should prepare a formal plan.
   a. retirement
   b. succession
   c. franchising
   d. liquidation

b. succession

6. What is one of the most common reasons why new small business start-ups often fail?
   a. The founders lack business expertise.
   b. The founders are too strict with financial controls.
   c. The founders don’t want fast growth.
   d. The founders have high ethical standards.

a. The founders lack business expertise.

7. When a new business is quick to act and captures a market niche before competitors, this is called .
   a. intrapreneurship
   b. an initial public offering
   c. succession planning
   d. first-mover advantage

d. first-mover advantage

8. When a small business is just starting up, the business owner is typically most focused on .
   a. gaining acceptance in the marketplace
   b. finding partners for expansion
   c. preparing an initial public offering
   d. bringing professional skills into the management team

a. gaining acceptance in the marketplace

9. At which stage in the life cycle of an entrepreneurial firm does the underlying business model begin to work well and growth starts to occur?
   a. Birth
   b. Early childhood
   c. Maturity
   d. Breakthrough

d. Breakthrough

10. A venture capitalist who receives an ownership share in return for investing in a new business is providing financing.
    a. debt
    b. equity
    c. corporate
    d. partnership

b. equity

11. In financing, a business owner borrows money as a loan that must eventually be repaid to the lender along with agreed-upon interest.
    a. debt
    b. equity
    c. partnership
    d. limited

a. debt

12. The people who take ownership shares in new ventures in return for providing the entrepreneurs with critical start-up funds are called .
    a. business incubators
    b. angel investors
    c. Business Development Program
    d. intrapreneurs

b. angel investors

13. The form of small business ownership protects owners from any personal losses greater than their original investments, while the form separates them completely from any personal liabilities.
    a. sole proprietorship, partnership
    b. general partnership, sole proprietorship
    c. limited partnership, corporation
    d. corporation, general partnership

c. limited partnership, corporation

14. The first component of a good business plan is usually a/an .
    a. industry analysis
    b. marketing strategy
    c. executive summary of mission and business model
    d. set of financial milestones

c. executive summary of mission and business model

15. If a new venture has reached the point where it is pursuing an IPO, the firm is most likely.
    a. going into bankruptcy
    b. trying to find an angel investor
    c. filing legal documents to become an LLC
    d. successful enough that the public at large will want to buy its shares

d. successful enough that the public at large will want to buy its shares