Jimma University

College of Business and Economics

Department of Management

Model Exam
Name ____________________________ID Number___________
1. The following are various reasons for firms to just take other alternatives than exporting,
Except,
A. Overcoming trade barriers
B. Reducing tariffs by having local content
C. Reducing transport and production costs
D. Achieving better market Skimming
2. The following data represents a sample of 10 scores on statistics quiz: 16, 16, 16, 16, 16, 18,
18, 20, 20 and 20. The mean score is

A. 17.6 C. 12.2

B. 15.8 D. 10.4

3. Financing decision of the financial management not concerned about one of the following

A. Source fund B. Cost of Fund C. Mix of fund D. Asset mix

4. All of the following statements are correct about the nature of management information
systems except?
A. It is a system which provides information support for decision making in the
organization.
B. It is an integrated system of man and machine for providing the information to
support the operation of an organization.
C. It is a system based on the database of the organization evolved for the purpose of
providing information to the managers only.
D. It is a computer-based information system.
5. A system has to be effective and efficient for the highest utility to the user of the system.
Efficiency is explained by the following?
A. input-output ratio
B. Productivity
C. Quality
D. Quantity

6. ___ is a market in which money is transfer from one economic unit to the other economic
unit

A. Product market C. Financial Market

B. Factor market D. labour market

7. The seller’s communication effort is focused on informing and persuading the prospect with
the goal of making a sale:
A. Personal selling
B. Advertisement
C. Sales Promotion
D. Publicity
8. A specific form of collaboration between two or more companies.

A. Strategic alliances
B. Contract Manufacturing
C. Franchising
D. Licensing
9. Which one of the following is true about the difference between goal and objective?

A. Objective is broad, while objective is measurable.

B. Objective is long-term, while goal is short-term.
C. Goal is too general, while objectives are SMART.
D. A and B

10. All of the following are categories of modern management except:

 A. System approach
B. Contingency approach
C. Scientific approach
D. Quantitative approach
11. Operations research is based upon collected information, knowledge and advanced study of
various factors impacting a particular operation. This leads to more _____________
A. Management processes
B. Models
C. Decision making
D. Procedures
12. Sometimes managers have no clear understanding about decision course of action as well as
corresponding outcome. However, the he/she propose different criteria as possible bases for
decision making. This refers decision making under a condition of:
A. Uncertainty
B. Certainty
C. Conflict
D. Risk
13. Which one of the following factor affects an entrepreneur’s Persuasion and networking
Quality?
A. Socio-cultural background and perceptions.
B. Communication skills.
C. Negotiation skills
D. All.
14. Which of the following is correct about organizing function?
A. Organizing groups works and resources without considering unity of direction
B. Organizing sets clear-cut lines of authority and duties of employees and units
C. Managers have more control on informal organization than the formal ones
D. Levels of authority is similar across levels of management
15. In degenerate solution; value of objective function is _____________.
A. increases infinitely
 B. basic variables are nonzero
C. decreases infinitely
D. One or more basic variables are zero
16. Among the following which one represent a process through which the information from
outside environment is selected, received, organized and interpreted to make it meaningful.
A. Perception
B. Attitude
C. Personality
D. Behavior
17. A perceptual error that involves projecting one’s own characteristics to other people, is called
A. Projection bias
B. Stereotyping
C. Primacy Effect
D. Contrast
18. One of the following is not true about the decision rules of project evaluation criteria’s
A. Accept the project if, NPV ≥ 0
B. Reject the project if, PI > 1
C. Reject the project if, PBP ≥ The required standard
D. All of the above
19. The main objective of working capital management is
A. Avoiding excessive amount of current assets
B. Avoiding shortage of current assets
C. Avoiding both excessive and shortage of current asset level
D. Minimizing shortage cost only
20. Which of the following is false about planning?
A. Planning is a means not an end
B. Planning is performed at all levels of management
C. Standing plans supports the accomplishment of single use plans
D. Well-crafted planning not need derivative plans
21. All of the following are true about decision making except:
A. All managers make decision
 B. Decision making involved in all functions of management
C. Non crisis problems require immediate decision than crisis one
D. Managers make poor decision due to fear of its consequence
22. Identify the correct match of staffing functions:
A. selection –Man power planning –recruitment – placement-induction
B. Recruitment -- Man power planning – selection – placement-induction
C. Selection –recruitment – placement-induction-man power planning
D. Man power planning –recruitment – selection-induction-placement
23. Which financing policy current assetsis less costly but risky financing
A. Conservative C. Aggressive
B. Matching D. offsetting
24. All one of the following statements are correct and explain the fact concerning why
information system (technology) matters except?
A. Investment in information technology (hardware, software, and telecommunications
equipment) tends to grew over time.
B. In many industries, survival and even existence without extensive use of information
systems is inconceivable.
C. Firms that invested wisely in information technology experienced continued growth
in productivity and efficiency.
D. Information system could not be relevant to achieve a strategic advantage over your
rivals and to differentiate yourself from your competitors.

25. One of the common Problems that the decision maker faces while trying to make a rational
decision is ?
A. Knowing the problem
B. sufficient knowledge and time
C. Misappraisal of uncertainties and risks
D. Having full choice

26. Financial system is

 A. Is a system that regulate the flow of money from one economy unit to the other
economy unity
B. Is a system that combine different resources to produce goods and services to the
society
C. Is a system that circulate money from highly productive area to less productive area
D. The only participant in financial system are banks
27. Identify the correct explanation regarding explicit and tacit knowledge.
A. Tacit knowledge can be written down and communicated to others.
B. Explicit knowledge is more of action oriented.
C. Explicit knowledge known below the level of consciousness.
D. Explicit knowledge is well organized knowledge.
28. Which one of the following in not the Role of Entrepreneurs in Economic Development?
A. Wealth generation
B. Creation of employment opportunity
C. Provide Homogeneity in firms
D. Balanced Regional Development
29. Which one of the following is not quality of an entrepreneur?
A. Not taking risk.
B. Opportunity-seeking
C. Demanding for efficiency and quality
D. Information-seeking
30. Which stage of group development characterized by conflict and disagreement.
A. Forming Stage
B. Norming Stage
C. Storming stage
D. Performing stage
31. Which one of the following can’t be considered as the benefits of studying OB?

A. To have full dependence common sense

B. Development of soft skills/ interpersonal skills

C. Personal Growth through insight into human behavior

 D. Understanding, Predicting, and Influencing behavior

32. A form of business, which make the enterprise separate legal entity that is run by
stockholders having limited liability is called?

A. Corporation
B. Proprietorship
C. Partnership
D. C and D.
33. Which type of decision making condition mostly prevails in today’s business
organizations?
A. certainty
B. Uncertainty
C. Risk
D. probability
34. ___is a characteristics of quality of information which answers the answer to the question-
does the information meet the purpose of the decision making for which it is being collected?
A. Consistency
B. Impartiality
C. Validity
D. Reliability

35. Which one is true about today financial managers

A. Their function is only raising of fund

B. They not participate in fund allocation
C. Controlling of the allotted fund is out of their scope
D. planning, organizing, raising, allocating and controlling of financial resource
function

36. Among the following which one can’t be considered as characteristics of Organizational
behavior?

A. It is a normative science
 B. Having a distinctive humanistic outlook
C. It is Performance (objective) oriented
D. It replaces systematic study with intuition.

37. The choice of promotion will depend on:

A. Mark audience
B. Firm’s intentions
C. The merchandises or facilities marketed
D. All of the above
38. ___Is a major use of data warehouse databases and the static data they contain which can be
used to analyze and reveal hidden patterns and trends in historical business activity?
A. Database maintenance
B. Database interrogation
C. Application Development
D. Data mining
39. Which one of the following intelligent technique does not arrive at the same solution again
with the same input data
A. Fuzzy logic
B. genetic algorithm
C. neural network
D. case based reasoning
40. Athlete Derartu Tulu, a famous long runner, participates in different kinds of national
occasions including playing a negotiator role whenever there is conflict among individuals
and parties.What kind of power was she possibly exercising to influence others?

A. Expert power
B. Referent power
C. Reward power
D. Coercive power

41. Which one of the followings is not correct about the assumptions of Maslow’s need theory?

A. Only unsatisfied need can influence behavior

 B. A person’s need is arranged hierarchically
C. A person will at least minimally satisfy each level of need before filling the need at the
next level
D. A person who couldn’t satisfy his higher level of needs, frustrate and go back to the
lower level of needs.

42. Suppose data are normally distributed with a mean of 120 and standard deviation of 30.
Between what two values will approximately 68% of the data fall?

A. 60&180 C. 90&150
B. 105&135 D. 30&210

43. The first and the most crucial step for starting a business which can convert a simple
idea/innovation into a successful business venture is referred to as?

A. Idea generation
B. Innovation
C. Business plan
D. Creativity

44. Which one of the following is not the importance of a business plan?

A. To plan what to do in the courses of the business establishment process.

B. To measure the performance on how things have been done.
C. To strictly and over control peoples in the business establishment and development.
D. To show the demand and sources of different resources.

45. A researcher is studying students in college in California. She takes a sample of 400 students
from 10 colleges. The average age of all college students in California is

A. A statistic C. The median

B. A parameter D. A population

46. The type of statistics that is concerned with the procedure and methodology for obtaining
valid conclusions is called
 A. Population statistics C. Descriptive statistics
B. Inferential statistics D. Parameter

47. All of the following are true about management except:

A. Management is a social process as it involves human element of employees
B. Organizations having too many hierarches have three levels of management

C. Management draws its concepts both from art and science

D. Managerial skills are equally essential for different levels of management

48. Managers should initiate changes and supports innovation to improve organizational
performance:
A. Decisional role

B. Entrepreneur role
C. Negotiator role
D. Resource allocator role

49. According to Fayol’s fourteen series of administrative principles, which one could be used as
managers should promote harmony and discourage or avoid those things that disturb
harmony as well as share enthusiasm or devotion to the organization?
A. Authority and responsibility
B. Unity of command
C. Unity of direction
D. Esprit de corps’

50. The degree to which numerical data tend to spread from an average value of the data is
known as

A. Central tendency C. Statistics

B. Dispersion D. Standard deviation

51. Which one of the following is not the characteristic of binomial probability distribution?
A. The probability of success and probability of failure are the same for each trial
 B. The number of trials is fixed
C. The trials are independent
D. The trials are dependent
52. Which one of the following statement is false regarding normal probability distribution?

A. It is specified by its mean and standard deviation

B. The mean & standard deviation of standard normal distribution are 0 and 1 respectively
C. It is bell shaped and has a single peek at the center of the distribution
D. It is symmetrical about the mean
E. None

53. Gender and state of birth are examples of which type of data?

A. Discrete C. Categorical
B. Continuous D. Ordinal

54. Over the past 5 years, the return on stock A has averaged 10% with standard deviation of 3%.
The return on stock B has averaged 4 % with standard deviation of 1%. Which of the
following statement is true?

A. Stock A has smaller relative variation than stock B

B. Stock B has smaller relative variation than stock A
C. Both stocks exhibit the same relative variation
D. Unable to tell with the given information

55. What is the value of X1 & X2 respectively in the following linear programming problem;
Maximize Z= 4X1+X2
Subject to: 5X1+10X2 ≤ 450
X1+X2≥ 30
X1, X2>0
A. 0 and 45
B. 90 and 0
C. 0 and 30
D. 30 and 0
56. Which one is true about Ethiopia financial system
A. It is market based financial system because huge amount of money transfer from
surplus unit to deficit unit through financial markets
B. It is bank based financial system and banks mobilize money from one economic
unit to the other economic unit efficiently at low cost and low interest because of
this investment is widely spread.
C. The absence of organized secondary financial market and a less organized primary
market of the nation makes the banks the only player of the system. Even if banks
are participating in good manner but still the circulation of money is slow, because
of this investment are promoted as expected.
D. Is bank based and the velocity of money is flowing as required because this the
economy is growing in a well manner
57. In Program Evaluation Review Technique for an activity, the optimistic time 2, the
pessimistic time is 12 and most likely time is 4. What is the expected time?
A. 0
B. 1
C. 5
D. 6
58. A company manufactures two products ‘X’ and ‘Y’. Each product has to be processed in
three departments: welding, assembly and painting. Each unit of X spends 2 hours in the
welding department, 3 hours in assembly and 1 hour in painting. The corresponding times for
a unit of Y are 3, 2 and 1 hours respectively. The employee hours available in a month are
1,500 for the welding department, 1,500 in assembly and 550 in painting. The contributions
to profits are $100 for product X and $120 for product Y.

What is the objective function (Z) to be maximized in this linear programming problem
(where Z is total profit in $)?

A. Maximize Z = 120X + 100Y

B. Maximize Z = 1500X+ 1500Y
C. Maximize Z = 2X + 3Y
D. Maximize Z = 100X + 120Y
59. Goods have to be transported from S 1, S2 and S3 to destinations D1, D2 and D3. The
transportation cost per unit, capacities of the sources and the requirements of the destinations
are given in table below.

D1 D2 D3 Supply
S1 8 5 6 120
S2 15 10 12 80
S3 3 9 10 80
Demand 150 80 50
Based on the above data, how many units will be transported over the route S1 to D3 if
northwest Corner method (NWCM) and Least Cost method (LCM) used respectively?
A. 0 and 40
B. 50 and 0
C. 120 and 0
D. 70 and 50
60. ________ is a person who does entrepreneurial work within large
organization is referred as?

A. Individual entrepreneur
B. Intrapreneur
C. Entrepreneurial Organization
D. All

61. Which one of the following can be a good source of business idea?

A. Learn from successful business owners.

B. Ones Owen experience.
C. Local business area survey.
D. All

62. In time value of money concept

A. Birr today is less worthy than birr tomorrow
B. Birr today is more worthy than birr tomorrow
 C. Birr today is equal with birr tomorrow
D. Time has no effect on Birr value
63. An organizational structure which group people by function and product teams
simultaneously is called?
A. Product Team Structure
B. Matrix structure
C. Hybrid structure
D. Functional Structure
64. Which one is false
A. Commercial banks are depository financial institutions
B. Development bank of Ethiopia is depository financial institutions
C. Insurance and pension fund are non-depository institution
D. Credit and saving associations, micro finances, SACCOS are depository financial
institutions.
65. For which activity in the knowledge management value chain is Document management
system (that digitize, index, and tag documents according to a coherent framework) is of
great importance?
A. acquisition
B. Dissemination
C. application
D. storage
66. Which one of the following refers to the collective and individual experience of applying
knowledge to the solution of problems
A. Data
B. Information
C. Knowledge
D. Wisdom
67. Which bank is correctly matched with its main function
A. Commercial bank facilitating international trade
B. Mortgage bank promoting house construction
C. Exchange bank promoting local trade activities
 D. Insurance promoting saving
68. A study of business environment offers the following benefits, except?

A. Provides information about environment, which is essential for successful

operation of business firms.
B. It opens up fresh avenues for the expansion of new entrepreneurial operations.
C. Knowledge about changing environment enables businessmen to adopt a dynamic
approach and maintain harmony of business operations with the environment.
D. None.

69. What is the total cost, when using NWCM based on the above problem (Question-6)?
A. 5650
B. 2680
C. 3680
D. 4560
70. Graphical method of linear programming is useful when the numbers of decision variable are
__________.
A. 3
B. 2
C. 4
D. Infinite
71. Which one of the following is the major source of managerial power or influence?
A. Coercive power
B. Reward power
C. Legitimate power
D. Expert power
72. Are controls that give managers instant feedback and it applies to process:
A. Feedback controlling
B. Concurrent controlling
C. Feedforward controlling
D. Preventive controlling
73. Solve the following assignment problem. Cell values represent cost of assigning job A, B, C
and D to the machines I, II, III and IV.

Machines
I II III IV
A 10 12 19 11
Jobs B 5 10 7 8
C 12 14 13 11
D 8 15 11 9
Based on the above data, which assignment is optimal?

A. A---II; B---III; C---IV; D---I

B. A---I; B---II; C---III; D---IV
C. A---IV; B---I; C---II; D---III
D. A---II; B----I; C---III; D---IV
74. What is the total cost of optimal assignment based on the above problem (question-9)?
A. 30
B. 40
C. 38
D. 75
75. From the following which one is qualitative variable?
A. The number courses that students take at Arsi university
B. Weight of learners at Arsi University
C. Income of some households
D. Type of automobile people drive
76. Direct compensation includes which of the following:

A. Flexible benefits C. Workers’ Compensation

B. Long-term incentive pay D. Unpaid leave

77. Indirect compensation is represented by which of the following:

A. Social Security benefits C. Differential pay

B. Short-term incentive pay D. Merit pay
78. A time period in which the appropriateness of newly hired employee is tested is termed as;

A. Retirement C. Socialization
B. Probation D. Induction

79. Which of the following can be a remedial alternative in case employee supply exceeds
employee demand?

A. Subcontracting C. Overtime work

B. Recruitment D. Early retirement

80. Bureaucratic leadership style is ineffective when:

A. Staff loses their interest in their jobs and in their co-workers

B. Staff performing routine tasks over and over
C. Staff needs to understand certain standards or procedures
D. Safety or security training conducted

81. What of the following is not the purpose of medical examination certificate required from a
newly recruited employee?
A. To reject his/her employment if he/she is found unhealthy
B. To assign him/her in a position which fits to his/her illness
C. To identify the liability of the employer
D. To evaluate the health benefits required from the employer
82. Which one of the following is Transformational leader Behaviors

A. Contingent reward C. Passive management by exception

B. Active management by exception D. Idealized influence

83. According to Douglas McGregor theory of Y, employees are:

A. Lazy C. Have poor work habits

B. Uncooperative D. Have positive attitudes to work

84. One strategic business reason for offering a comprehensive benefits package to employees is:
 A. to help attract and retain employees
B. to beat out the competition
C. to decrease employer operating costs
D. to offer cafeteria-style health care plans to employees

85. What provides counseling and other help to employees having emotional, physical and other
personal problems?

A. Employee Service programs

B. Drug Free Workplace Act
C. OSHA
D. Employee wellness programs

86. A type of survey in it Data is collected at one point in time from a sample selected to
describe some larger population at that time is
A. Longitudinal B. Cohort studies C. Cross sectional D. Panel studies
87. Which one of the following is respondent error?
A. Interviewer cheating C. Sample selection error
B. Deliberate Falsification D. Data processing error
88. A type of research aims at finding a solution for an immediate problem facing a society or an
industrial/business organization is
A. Conceptual B. Fundamental C. Action D. Analytical
89. A variability that exists between in a set of observation is
A. mean B. Dispersion C. median D. mode
90. Which of the following is a legally mandated employee benefit in Ethiopia?

A. Social security C. workers’ compensation

B. unemployment compensation D. Life and health insurance

91. Which of the following is the first step to conduct employee’s performance appraisal?

A. Establish performance C. Identify performance gap

standard D. Communicate performance result
B. Measure actual performance
92. Which one of the following is correct about participant observation?
A. The researcher becomes part of the group studied and participates in their daily life
and activities
B. they may not wish to take part in
C. observing their everyday situations and their behavior in these situations
D. Conversation is used in order to discover the subjects' own interpretations of events.
93. Identify the correct statement
A. If the population is normal, then the sampling distribution of the sample mean is also
normal for all sample size.
B. As the sample size increases, the shape of sampling distribution of the sample means
tends to be more and more approximate to normal distribution.
C. Sampling distribution of the sample mean is normal if the sample size is greater than or
equal to 30 irrespective of the shape of the population distribution.
D. All of the above.
94. When a null hypothesis is accepted, it is possible that:
A. A correct decision has been made.
B. A Type II error has been made.
C. A Type I error has been made.
D. Both A and B have occurred.
95. Assume that a chi-square test of independence is to be performed on a contingency table with
three rows and four columns. How many degrees of freedom should be used?
A. 6
B. 8
C. 9
D. 16
96. Which of the following statement is false?
A. Correlation coefficient can be positive, zero, or negative.
B. A zero correlation coefficient shows lack of any relationship between variables.
C. Correlation coefficient is a more objective and definitive measure than coefficient of
determination.
D. All of the above.
97. one of the following is not correct about criteria’s for good research
A. The researcher should report with complete frankness, flaws in procedural design and
estimate their effects upon the findings.
B. The purpose of the research should be clearly defined and common concepts be used.
C. The research procedure used should be described in sufficient detail to permit another
researcher to repeat the research for further advancement.
D. Experience has less value for Greater confidence in research
98. Which kind of validity can be established when there is high degree of correlation between
two different sources responding to the same measure?
A. Criterion – related validity C. Discriminant validity
B. Convergent-validity D. Transcribing
99. A written legal document prepared by worker’s association representatives after thorough
negotiation with management representatives, which holds various provisions of terms of
employment and employees benefit is termed as

A. Employment contract
B. Collective agreement
C. Employee Discipline
D. Human resource policy
100. ___________ entry modes are long-term non-equity associations between an
international company and entity in a foreign target country.
A. Exporting
B. Contractual
C. Greenfield
D. Acquisition