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Created on March 13, 2026 By

CA Sonal Saboo

CMA Foundation

Foundation FBEM PN-4 Quiz 4

This quiz is based on the CMA Fundamentals of Business Economics and Management paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA FBEM concepts.

1 / 27

Category: Fundamental of Business Economics and Management PN-4

1. Who emphasized harmony of objectives is crucial to the success of direction?

a. F.W.Taylor

b. Henry Fayol

c. Peter Drucker

d. George Terr

2 / 27

Category: Fundamental of Business Economics and Management PN-4

2. A manager has to exhibit the style of leadership depending on the :

a. Performance

b. Time

c. Situation

d. Period

3 / 27

Category: Fundamental of Business Economics and Management PN-4

3. The premises over which a firm has no control are known as

a. Controllable premises

b. Semi-Controllable premises

c. Uncontrollable premises

d. None of the above

4 / 27

Category: Fundamental of Business Economics and Management PN-4

4. Who contends that “Training is an act of increasing the knowledge and skill of an employee for doing a particular job”?

a. Edwin Flippo

b. Michael J. Jucius

c. O. Jeff Harris

d. Andrew Carnegie

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Category: Fundamental of Business Economics and Management PN-4

5. Which activity brings the job-seeker and employer in contact with one another?

a. Recruitment

b. Selection

c. Induction

d. Placement

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Category: Fundamental of Business Economics and Management PN-4

6. refers to the introduction of a person to the job and the organization.

a. Induction

b. Placement

c. Orientation

d. None of the above

7 / 27

Category: Fundamental of Business Economics and Management PN-4

7. External sources of recruitment include:

a. Employment Exchanges

b. Advertisements

c. Employee walk-ins

d. All of the above

8 / 27

Category: Fundamental of Business Economics and Management PN-4

8. Which of the following are the methods of off-the-job training?

a. Role playing

b. Case studies

c. Lectures, classroom instruction

d. All of the above

9 / 27

Category: Fundamental of Business Economics and Management PN-4

9. Training conducted away from the actual work setting is called:

a. On-the-Job Training

b. Off-the-Job training

c. Step-by-Step Training

d. Job-Instruction Training

10 / 27

Category: Fundamental of Business Economics and Management PN-4

10. T-group training is also known as :

a. Classroom Training

b. Apprenticeship Training

c. Internship Training

d. Sensitivity Training

11 / 27

Category: Fundamental of Business Economics and Management PN-4

11. Selection is a process of rejection and hence it is called a process :

a. Positive

b. Negative

c. Either (a) or (b)

d. None of the above

12 / 27

Category: Fundamental of Business Economics and Management PN-4

12. is concerned with providing the organization with the right number of people at the right place, and at the right time so that the organization would be able to achieve its goals effectively.

a. Recruitment

b. Staffing

c. Selection

d. Development

13 / 27

Category: Fundamental of Business Economics and Management PN-4

13. is defined as the process of obtaining and maintaining the capable and competent people to fill all positions from top to operative level.

a. Staffing

b. Selection

c. Recruitment

d. Training

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Category: Fundamental of Business Economics and Management PN-4

14. Which of the following is not an agency cost?

a. Residual loss.

b. Bonding costs.

c. Concurrent loss

d. Monitoring costs.

15 / 27

Category: Fundamental of Business Economics and Management PN-4

15. Which of the following regarding agency theory is correct?

a. Agency theory only applies to large entities.

b. Agents are assumed to be in a position of power.

c. Agents act in the best interest of the principal.

d. Agency theory defines the relationship between agents and directors.

16 / 27

Category: Fundamental of Business Economics and Management PN-4

16. Which of the following regarding residual loss is correct?

a. Bonding costs do not have an effect on residual loss.

b. Residual loss is incurred by the agent because an agency relationship exists.

c. A reduction in residual loss is likely to be the result of an increase in monitoring costs

d. Under agency theory, residual loss can be reduced to zero by good governance.

17 / 27

Category: Fundamental of Business Economics and Management PN-4

17. According to Davis, Schoorman and Donaldson (1997), the managers being a steward of the company will try to protect and maximize through firm performance.

a. shareholder’s wealth

b. stakeholder’s wealth

c. both (a) and (b)

d. none of the above

18 / 27

Category: Fundamental of Business Economics and Management PN-4

18. Who had said that leader’s stewardship choice can motivate and facilitate reciprocal stewardship behavior from the employee?

a. Pearson and Marler

b. Alchian and Demsetz

c. Davis, Schoorman and Doanldson

d. Jensen and Meckling

19 / 27

Category: Fundamental of Business Economics and Management PN-4

19. Agency Theory’ developed by :

a. Alchian and Demsetz

b. Jensen and Meckling

c. Jensen and Fama

d. All of the above

20 / 27

Category: Fundamental of Business Economics and Management PN-4

20. Which one of the following represents the best effort to reduce the agency problem?

a. paying senior managers a cash bonus each year based on the number of people employed by the company

b. giving senior managers bonuses consisting of shares of company share whenever the company improves its production efficiency

c. increasing the salary of the company president every time the company opens a new store

d. providing company cars to all managers employed by the firm for more than one year

21 / 27

Category: Fundamental of Business Economics and Management PN-4

21. The view that sees profit maximization as the main objective is known as:

a. Shareholder theory

b. Agency Theory

c. Stakeholder theory

d. Stewardship theory

22 / 27

Category: Fundamental of Business Economics and Management PN-4

22. Agency theory suggests that managers(the agents), particularly those of large , publicly-owned firms, may have different objectives from those of the:

a. Workers

b. Subordinates,

c. Shareholders,

d. Employees

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Category: Fundamental of Business Economics and Management PN-4

23. Management is the art and science of decision making and leadership.

a. Harold Koontz

b. Donald J. Clough

c. Louis Allan

d. Terry

24 / 27

Category: Fundamental of Business Economics and Management PN-4

24. involves missions and objectives.

a. Organizing

b. Planning

c. Staffing

d. Coordination

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Category: Fundamental of Business Economics and Management PN-4

25. Which of the following does not corroborate the concept of ‘Management as a Science’?

a. Cause & Effect Relationship

b. Test of Validity

c. Personal Skill

d. Experimentation & Observation.

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Category: Fundamental of Business Economics and Management PN-4

26. Which of the following is not a function of managers?

a. Designing

b. Organizing

c. Leading

d. Planning

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Category: Fundamental of Business Economics and Management PN-4

27. Which of the following statements is not correct?

a. Management is a goal- oriented process

b. Management is a universal process

c. Management is a continuous process

d. Management is a rigid process

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Foundation PN-4 FBEM Quiz 4

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