Business Management Test - Unit 5 Finance & Ethics

1. Which of the following is a task that might be undertaken by a finance professional:

• Managing communications with customers and suppliers
• Manage payroll
• Keeping records of human resource infractions
• Hiring and training new employees

2. Why are ethics especially important to those who work in finance?

• Ethics prevent companies from ever losing money.
• People who work in finance are naturally unethical.
• Ethics challenge companies to reduce operating expenses.
• Unethical behavior in finance leads to catastrophic results.

3. Why do finance professionals continue to act unethically, despite the consequences?

• They are greedy and only care about making as much money as they can.
• They are always rewarded for their unethical behavior.
• The finance field is full of temptations and pressures to be unethical.
• There are no legal consequences for unethical actions.

4. When unethical decisions come from the top of an organization, it is difficult to go against them. This is an example of

• short-term gratification
• sunk costs
• obedience to authority
• overoptimism and overconfidence

5. The tendency to behave in the same way that everyone else does is __________, whereas __________ occurs when people make decisions together in a way that discourages individual responsibility or creativity.

• conformity; groupthink
• groupthink; incrementalism
• conformity; framing
• framing; incrementalism

6. When Penny started her job, she believed that lying was completely wrong. However, after two years, she has started to exaggerate financial projections and now believes that lies are only wrong when they cause direct harm. This is an example of

• self-interest
• obedience to authority
• conformity
• incrementalism

7. Nico knows he would never do anything unethical, but he is sure that all of his coworkers are tempted at one point or another. Nico is demonstrating

• overoptimism and overconfidence
• short-term gratification
• framing
• loss aversion

8. It is difficult to make decisions that can cause you harm, which is why financial professionals often act unethically due to

• loss aversion
• self-interest
• conformity
• sunk costs

9. The tendency to respond to situations depending on how those situations are posed or viewed is known as

• groupthink
• framing
• obedience to authority
• overoptimism and overconfidence

10. Rita knows she will get a bonus if she pushes for her company to go through with a merger, but she knows that in the long term, this merger might threaten her job. If Rita supports the merger, she is likely motivated by

• sunk costs
• overoptimism and overconfidence
• short-term gratification
• incrementalism