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PRAXIS Praxis Business Education: Content Knowledge (5101)Exam Sample Questions:

1. The interest rate on short-term loans that large banks charge their commercial borrowers who have excellent credit ratings is called the

A) discount rate
B) market rate
C) prime rate
D) funds rate

2. Which of the following types of statements is referred to as a picture of a company in the future?

A) Closing statement
B) Mission statement
C) Value statement
D) Vision statement

3. Which of the following is a primary purpose of financial markets?

A) Allocating capital efficiently
B) Controlling inflation
C) Increasing the price of common stock
D) Lowering the yield on bonds

4. Which of the following is characteristic of a laissez-faire management style?

A) Taking charge and solely developing policies and procedures
B) Asking for employee input but failing to follow up on suggestions
C) Seeking input of all workers yet exercising total control
D) Permitting employees to make independent decisions and providing only general guidance

5. Company A is the category leader in the orange juice industry and produces Product A at $3.00 per unit.
Company B is the second category leader in the industry and produces Product B at $2.70 per unit. Because an early frost affected the orange crop, Company A raised the price of Product A to $4.00 per unit. Company B subsequently raised the price of Product B to $3.60 per unit. Which of the following pricing strategies is Company B using for Product B?

A) Discount pricing
B) Pure parity
C) Premium pricing
D) Dynamic parity

Solutions: