3.1 What is business

A corporate objective of survival is most likely to be set by:

• A long-established and profitable family business

• A profitable multinational company

• A high-profile start-up financed by substantial venture capital

• An established business now experiencing growing losses

Which of these statements about public limited companies (“PLC”) is true?

• A PLC doesn't have to offer its shares on a stock exchange

• Shareholders in a PLC do not have limited liability

• The general public may invest in any PLC if they wish to

• A PLC must have a minimum share capital of £1million

What is the market capitalisation of a company with a share price of £1.75, dividends of 10p per share and 10 million shares in issue?

• £175m

• £10m

• £1m

• £17.5m

The external environment concerns features of the business environment that are:

• Within the control of a business

• Outside the control of a business

• Opportunities for a business

• Threats for a business

The main objective of UK monetary policy is normally

• Minimising interest rates

• Lowering unemployment

• Price stability

• Encouraging business investment

The following are all commonly used as corporate objectives EXCEPT which one?

• Return on investment

• Inventory turnover

• Market share

• Marketcapitalisation

The FTSE-100 share index closed on 31 December 2015 at 6,242.3 having started 2015 at 6,566.1. Which of these statements about share prices in 2015 are, therefore true.

• The FTSE-100 index fell by 4.9% during 2015

• The FTSE-100 index rose by 5.2% during 2015

• All share prices fell during 2015

• Most share prices rose during 2015

Next plc is a quoted company operating a large fashion retailing business importing over 95% of its merchandise. Which of the following factors is LEAST likely to effect Next plc’s share price?

• Strategies of its close competitors

• The level of household disposable income in the UK

• Exchange rates between the UK and Asia

• The rapid growth of discount grocery supermarkets

A company informs the stock market that its results will be worse than the market currently expects. This is known as a:

• Dividend downgrade

• Profits warning

• Market capitalisation downgrade

• Dividendannouncement

The value of economic activity in an economy like the UK, US or Germany is officially measured in terms of:

• Total Household Income

• National Income

• Aggregate Economic Demand

• Gross Domestic Product