The Wall Street Journal Weekly Quiz s7

The Wall Street Journal Weekly Review & Quiz Covering front-page articles from Oct 29 – Nov 4, 2005 Professor Guide with Summaries Fall 2005 Issue #11 Developed by: Scott R. Homan Ph.D., Purdue University

Questions 1 – 12 from The First Section, Section A

Top Cheney Aide Charged in Leak Inquiry By ANNE MARIE SQUEO and JOHN D. MCKINNON October 29, 2005; Page A1 http://online.wsj.com/article/SB113049965171782403.html

ASHINGTON -- A federal grand jury charged Vice President Dick Cheney's chief of staff, I. Lewis "Scooter" Libby, with five criminal counts stemming from the two-year probe into who leaked a covert agent's identity. Mr. Libby was not charged with intentionally disclosing the identity of an undercover intelligence agent, which can be a crime under a 1982 law. Instead, Special Prosecutor Patrick Fitzgerald charged that he made false statements, perjured himself and obstructed justice by lying to investigators and the grand jury about how and when he learned the identity of Valerie Plame, a Central Intelligence Agency operative, and disclosed it to reporters. (Read the indictment.1) "This is a very serious matter, and compromising national security information is a very serious matter," Mr. Fitzgerald said in announcing the charges. Mr. Libby, who resigned after the indictment, said in a statement that he was confident he would be exonerated. "I have conducted my responsibilities honorably and truthfully, including with respect to this investigation," he said. While the indictment struck down a key adviser, it wasn't as damaging as administration officials had feared. Karl Rove, President Bush's chief political adviser and deputy White House chief of staff, who was questioned several times by prosecutors, wasn't indicted. He remains under investigation, though Mr. Fitzgerald offered no clear signal about whether charges might be coming. Still, Mr. Libby held wide influence as both the vice president's top aide and an adviser to President Bush. Moreover, besides the cloud over Mr. Rove, legal proceedings could hurt Mr. Cheney if they reveal more about his role in the case. Among other things, the White House must prepare for the prospect that Mr. Cheney will be called to testify in a public trial about his role in the leak, as well as planning for the war in Iraq. More broadly, the indictment and fallout could again put the conduct of the Iraq war -- both past and present -- at center stage of Mr. Bush's presidency for the foreseeable future. "This case is bigger than the leak of highly classified information," said Senate Minority Leader Harry Reid, the Nevada Democrat. "It is about how the Bush White House manufactured and manipulated intelligence in order to bolster its case for the war in Iraq."

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 1 of 16 1. I Lewis "Scooter" Libby is a. a special prosecutor b. A CIA operative c. Vice President Cheney’s Chief of Staff Correct d. a newspaper reporter

2. I Lewis "Scooter" Libby is accused of a. unauthorized travel to Africa b. revealing the name of a CIA agent to reporters Correct c. carrying a concealed handgun in a restricted area d. gossiping about Carl Rove

Small Bites Why Kraft Decided to Ban Some Food Ads to Children By SARAH ELLISON October 31, 2005; Page A1 http://online.wsj.com/article/SB113072235663483869.html

J. L. Kraft started a cheese business in 1903, Kraft Foods Inc. has shaped an image as family-oriented as the Oscar Mayer hot dogs and Jell-O it sells. But last year, executives at the Northfield, Ill.-based food giant surveyed a troubling landscape. A major government-commissioned study found advertising contributes to childhood obesity. Two bills in Congress proposed regulation of children's advertising. Kraft, the nation's biggest food company, which spends about $90 million advertising directly to children every year, suddenly risked being depicted as a corporate villain. What happened next says a lot about how quickly companies can be forced into dramatic action when confronted with a challenge to their reputation. In January, Kraft announced it would quit advertising certain products to kids under 12. The move surprised the food industry and put Kraft at odds with competitors. It presented the risk of losing market share and millions of dollars in sales. Yet the strategy seems to be scoring points with policy makers. Democratic Sen. Tom Harkin, of Iowa, has praised Kraft's decision. Kraft was the only food manufacturer on California Gov. Arnold Schwarzenegger's recent "Honor Roll" for its policies to combat obesity. Critics say the policy gives Kraft too much discretion in deciding what's healthy and what isn't. They note the company still reaches young children through cartoon characters on its packaging. And in any case, the company continues marketing all of its products to the 12-and-up crowd.

A Compromise In the spring of 2004, executives came up with a compromise: Kraft would stop advertising some products to children under 12, but still market "healthier" food to kids between six and 12. While the idea may seem unremarkable, it was explosive within the industry. It violated one of the long-held tenets of the food industry: there are no "bad" foods. Kraft doesn't use negative terms to describe any of its products. But just admitting that certain foods were "healthier" than others was seen as revolutionary. To some, it was akin to a move by tobacco firms years earlier, when they finally agreed that "there is no such thing as a safe cigarette."

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 2 of 16 3. Kraft spends approximately this amount on advertising their products directly to children each year a. 5 million dollars b. 35 million dollars c. 90 million dollars Correct d. 150 million dollars

4. Kraft decided to stop advertising some products to children under 12, a. and concentrate on ads for sugary snacks for adults b. but still market "healthier" food to kids between six and 12 Correct c. and make sure that popular cartoon characters were featured on all cereals d. but just until the child obesity rate drops significantly

Nominee's Record Shows Backing Of Business Interests, Contracts By JESS BRAVIN and JEANNE CUMMINGS November 1, 2005; Page A1 http://online.wsj.com/article/SB113081189805884910.html

In 15 years on the federal bench, Judge Samuel Alito often has sided with positions backed by business leaders -- and shown himself a strict interpreter of contracts -- in cases ranging from employment discrimination and commercial speech to shareholder suits. Indeed, legal experts said that, while the immediate focus of supporters and critics yesterday was on social issues like abortion, Judge Alito's extensive track record on business and regulatory issues at the Philadelphia-based court is likely to play a large role in his nomination process. Judge Alito's Third Circuit is one of the smaller federal jurisdictions, but it hears a disproportionate share of business-related cases because its three-state territory includes Delaware, where many companies are incorporated, and the heavily industrial New Jersey and Pennsylvania. For those assessing Judge Alito, there are dozens of business cases to sift, some of which are widely known and many which are more technical. One of the best-known is a 1997 dissent in which Judge Alito argued against a racial-discrimination claim made by a black housekeeping manager who was denied promotion to a job at a Marriott International Inc. hotel. The position, at a hotel in Park Ridge, N.J., went to a white woman. While the court ruled the woman could take the case to a jury, Judge Alito argued that, although she might be able to claim she had been treated unfairly, that wasn't enough to let her sue. "What we end up doing then is...allowing disgruntled employees to impose the cost of trial on employers who, although they have not acted with the intent to discriminate, may have treated their employees unfairly," he wrote. "This represents an unwarranted extension of the anti-discrimination laws."

5. In 15 years on the federal bench, Judge Samuel Alito has often sided with positions backed by a. education leaders b. state government leaders c. business leaders Correct

6. Judge Alito's Third Circuit is one of the smaller federal jurisdictions, but it hears a disproportionate share of business-related cases because its three-state territory includes a. Delaware, New Jersey, and Maryland b. Delaware, New York, and New Jersey c. Delaware, New York, and Pennsylvania d. Delaware, New Jersey, and Pennsylvania Correct

PC Makers Facing a Flop In Home Entertainment By GARY MCWILLIAMS November 2, 2005; Page A1 http://online.wsj.com/article/SB113090575716186129.html

The personal-computer industry's march into the living room is proving to be a slog. A few years ago, the nation's Big Three PC makers charged into the market for big- screen TVs and digital cameras and music players, counting on their PC prowess to catapult them from the home office into home entertainment. They planned to exploit PC- style economics -- based on off-the-shelf components, low markups and high turnover -- to give consumers new choices and offer the big electronics retailers a lesson in low-cost selling. But Dell Inc.'s decision this week to eliminate its stand-alone U.S. consumer unit -- following Gateway Inc.'s decision to exit the business last year -- suggests the grand experiment may never take off. Indeed, these PC giants are finding the $125 billion consumer-electronics market tough going, even as they struggle to compete with ever- lower-cost PCs. (See related article1.) Profit at Dell's U.S. consumer-PC operation fell 33% in its fiscal second quarter to just $98 million -- a fraction of the company's total $1.1 billion in operating profits. Dell announced earlier this week that it would combine that unit with its North and South American sales operation, which earned $750 million in the second quarter. The consolidation will help reduce costs, Mr. Neff said.

7. Part of Dell's problem in consumer electronics is that it is running into stiff competition from a. large consumer-electronics retailers Correct b. small consumer-electronics retailers c. other large computer online retailers d. computer electronics retailers

8. Profit at Dell's U.S. consumer-PC operation ______in its fiscal second quarter. a. rose 33% b. fell 33% Correct c. rose 13% d. fell 13%

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 4 of 16 Huge Flood of Capital to Invest Spurs World-Wide Risk Taking By GREG IP and MARK WHITEHOUSE November 3, 2005; Page A1 http://online.wsj.com/article/SB113098528715487050.html

A week after Hurricane Katrina, a defaulted loan backed by aging tugboats and barges in coastal Alabama came up for sale. Mooring Financial Corp., a firm that buys troubled loans at a discount, was interested, but couldn't determine how well the boats had survived the hurricane, or even whether their cash-starved owner had kept up the insurance on them. So Mooring bid just 50 to 55 cents on the dollar, figuring that was generous for such a dicey deal. Instead, it lost out to a bidder who offered about 10 cents more on the dollar, says the Virginia firm's president, John Jacquemin. "We would have won this...one to two years ago," he says. "But in the current market, there are few, if any, 'ugly stepchildren' that fail to draw aggressive bids." It's a sign of a major global investment phenomenon: There's an unprecedented wave of capital flowing around the world, with all of its owners anxiously searching for a better return. World pension, insurance and mutual funds have $46 trillion at their disposal, up almost a third from 2000. In the same period global central-bank reserves have doubled to $4 trillion, and other gauges of available capital have risen as well. (See related story1.) Meanwhile, world central banks have kept short-term interest rates low, even after the Federal Reserve's latest quarter-point boost. That means investors who put their cash in safe money-market paper can net only a modest margin above inflation. The result is that global investors are diving into a wide range of riskier assets: emerging countries' stocks and bonds; real estate and real-estate-backed debt; commodity funds; fine art; private-equity funds, which buy stakes in nonpublic companies; and the investment contracts called derivatives, including a kind structured to permit the sophisticated to take huge bond risks. For good measure, many investors use today's low interest rates to borrow money to amplify their bets. This "leverage," in effect, thus enlarges the already overflowing pool of investment capital. As these markets draw more investors, whose buying pushes up their price, prospects rise that a reversal could cause widespread pain. Where does this global flood of cash come from? Ben Bernanke, the economist just nominated to head the Fed, last March identified what he called a "global savings glut," which he said helps explain the relatively low level of long-term inflation-adjusted interest rates in the world.

That there should be such a glut when U.S. consumers save none of their current income and their federal government borrows heavily might seem paradoxical. But plenty of others do save and accumulate cash to invest, including U.S. corporations. Companies' profits are near record levels, yet their expansion plans are muted, partly a hangover from the expansion excesses of the late-1990s stock-market bubble. So they have lots of money seeking a home. Abroad, meanwhile, many families' saving habits are the mirror image of Americans' free-spending ways. European and Japanese workers save far bigger shares of their

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 5 of 16 incomes, and Chinese households a stunning 25%. In all, China is expected to have about $116 billion to invest abroad this year, much of which goes into U.S. bonds.

9. World pension, insurance and mutual funds have ______at their disposal, up almost a third from 2000. a. $46 million b. $46 billion c. $46 trillion Correct d. $460 trillion

10. China is expected to have about ______to invest abroad this year, much of which goes into U.S. bonds. a. $116 million b. $11 billion c. $16 billion d. $116 billion Correct

Wide-Flying Moguls: Google Duo's New Jet Is a Boeing 767-200 By KEVIN J. DELANEY, J. LYNN LUNSFORD and MARK MAREMONT November 4, 2005; Page A1 http://online.wsj.com/article/SB113107413091988208.html

On the road, Sergey Brin and Larry Page have owned environmentally friendly hybrid vehicles such as the Toyota Prius. In the air, they apparently prefer something roomier. Google Inc.'s two billionaire founders, both 32 years old, will soon be cruising the skies in a Boeing 767 wide-body airliner. They bought the used plane earlier this year, Mr. Page says. The 767-200, typically an airline workhorse, is an unusual executive jet. It commonly carries about 180 passengers. Delta Air Lines operates over one hundred 767s. The Italian Air Force has ordered a modified 767 as an airborne tanker for refueling military jets. The 767-200 is almost 70% longer and more than three times as heavy as a conventional executive jet, such as a high-end Gulfstream. Mr. Page says his plane will hold about 50 passengers when its refurbishment is complete. A top Gulfstream business jet typically carries 15 or fewer. He declines to give other details. People in the aviation industry familiar with the planned interior say it will have a sitting area, two staterooms with adjoining lavatories and a shower. Farther aft will be a large sitting-and-dining area. At the rear will be 12 to 16 first-class seats for guests or employees and a large galley.

If the planes were filled to capacity on a round-trip coast-to-coast flight, however, the 767 looks more attractive. Based on the Conklin & deDecker data, a Gulfstream V would cost roughly $400 per flight hour per passenger to operate, compared with $260 for the duo's plane. The purchase of a wide-body jet for personal use might seem at odds with the Google founders' support for environmental causes. The company gives employees $5,000 if they buy hybrid gas-electric cars, for example.

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 6 of 16 Mr. Page, in response, notes a recent investment that Mr. Brin made on behalf of the co- founders and Mr. Schmidt in a $550-million fund to help finance projects that reduce greenhouse-gas emissions. "We've worked very hard to make sure our [net] impact on the environment is positive," Mr. Page says.

11. Google Inc.'s two billionaire founders, both 32 years old, will soon be cruising the skies in a a. Gulfstream V b. Boeing 757 c. Boeing 767 Correct d. Cessna Citation

12. The purchase of a jet for personal use might seem at odds with the Google founders' support for environmental causes. The company gives employees ______if they buy hybrid gas-electric cars, for example. a. $50 b. $500 c. $5,000 Correct d. $50,000

Questions 13 – 17 from Marketplace

Globalizing the Boardroom By JOANN S. LUBLIN October 31, 2005; Page B1 http://online.wsj.com/article/SB113071782343383802.html

When Paul Anderson took the helm of Duke Energy Corp. in late 2003, the Charlotte, N.C., company had only one foreigner, a Canadian, on its 11-member board of directors. Mr. Anderson soon persuaded Roger Agnelli of Brazil, who runs a big mining concern in that country, to accept a seat. Duke has invested $2 billion in Latin America since 1999. "It strikes me as foreign to not have foreigners on a major U.S. corporation's board," explains Mr. Anderson, who previously led BHP Billiton Ltd., an Anglo-Australian resources conglomerate. He diversified Billiton's all-Australian board to encompass five nationalities offering "a world view," he recalls. Mr. Anderson is now the sole American citizen on the board of Australia's Qantas Airways. Around the world, corporate boards are going global. Driven by a surge in cross-border takeovers, the clamor by shareholders world-wide for improved corporate governance and a rising pool of senior executives with overseas experience, multinational businesses increasingly are tapping directors from outside their home countries. Advocates say the broadened geographic reach brings new perspectives to the boardroom. Yet many U.S. companies haven't gotten the message. A 2005 survey by recruiters Spencer Stuart found that only 35% of 149 large U.S. businesses have at least one non-American director, a modest rise from 31% in 1999. By contrast, about 90% of Europe's largest concerns by market capitalization boast one or more directors from outside their home country. At about 49% of those 99 companies,

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 7 of 16 there is at least one American on the board, up from about 35% in 1999, according to an analysis for The Wall Street Journal by search firm Heidrick & Struggles International Inc. That may put U.S. companies "at a disadvantage in the global marketplace," says Gavin Anderson, president and chief executive officer of GovernanceMetrics International, a governance ratings and research service in New York. Any major American company with significant sales abroad needs "at least one individual on the board who represents the views of the rest of the world," Mr. Anderson says.

13. A 2005 survey by recruiters Spencer Stuart found that of 149 large U.S. businesses ______have at least one non-American director a. only 35% Correct b. only 10% c. close to 50% d. nearly 60%

Demand Soars For Fruit Used In Bird-Flu Drug By MEI FONG November 1, 2005; Page B1 http://online.wsj.com/article/SB113081469398884970.html

ANNING, China -- Taking a lunchtime break from examining his fields, a flushed Chen Jinning tips a tumbler at fellow farmers and bellows: "To bajiao," the Chinese word for star anise, the coin-sized fruit used in everything from Asian soup to French alcoholic drinks. Farmers at the table offer toasts to prosperity, to traditional agricultural methods, even to Swiss pharmaceutical giant Roche Holding AG, splattering foamy beer onto the plastic tablecloth. It didn't take much alcohol to make Mr. Chen and his friends giddy. Just 10 days ago, these farmers faced such low prices for star anise, some didn't bother to harvest their crops. Now, interest in the eight-pointed star anise has soared following disclosures earlier this month that its seed pod forms the genesis for oseltamivir, the generic name for Roche's drug Tamiflu. The drug is considered one of the possible defenses against an outbreak of human-to-human avian flu. Wholesale prices for the fruit, which is chiefly grown in southern China, have jumped 40% to about 0.7 yuan (about eight U.S. cents) per kilogram -- or 18 U.S. cents per pound -- in little over a week. Prices for the acid extracted from star anise and used directly in the drug's manufacture has jumped tenfold to $600 per kilogram over the past month. The heightened interest follows the recent outbreak of avian flu in poultry, which has spread from Asia to Europe. While cases of humans contracting the disease are relatively few, doctors fear the disease could mutate into a highly infectious strain against which humans have little resistance.

14. This Chinese fruit contains a chemical compound that is used to make the generic equivalent of Tamiflu a. pineapple

Cable Systems Plan Advanced Cellular Service By PETER GRANT and SARA SILVER November 2, 2005; Page B1 http://online.wsj.com/article/SB113090288493986076.html

Cable-TV companies are preparing to launch cellular-phone service with features they hope will top those offered by traditional wireless carriers -- a move that could further roil the telecommunications industry. A consortium of the country's largest cable operators -- including Comcast Corp., Time Warner Inc.'s cable division and Cox Communications Inc. -- announced it will sell cellphone service that runs over the wireless network of Sprint Nextel Corp. But the alliance is likely to go beyond the kinds of resale agreements that Sprint has worked out with companies including ESPN and Virgin Mobile, which use Sprint's network to deliver cellphone service under their brands, people familiar with the situation say. Sprint and the cable companies are discussing the development of cutting-edge features combining cellphone service with the television, land-line phone and high-speed Internet services the cable giants already offer. For example, they have discussed developing a handset that works as a cellphone outside the home but offers nearly the sound quality of a wired phone inside by linking wirelessly to a high-speed Internet connection. That would mean customers would need only one phone number and wouldn't suffer from weak cellphone signals while in their houses, a common problem. The cable venture also has discussed developing features that would allow customers to stream or download TV and Internet content into their phones wirelessly and to use the phones to program their digital-video recorders to tape certain shows, according to people familiar with the matter.

15. A consortium of the country's largest cable operators announced it will sell ______service that runs over the wireless network of Sprint Nextel Corp. a. High Definition TV b. cable TV c. broadband internet d. cellphone Correct

Generics Challenge Roche's Tamiflu Claims By NICHOLAS ZAMISKA and JASON DEAN November 3, 2005; Page B1 http://online.wsj.com/article/SB113098216326386983.html

Recent, surprising reports that generic Tamiflu can be made quickly and easily may have important implications for the global supply of the drug, which is seen as a hedge against a bird-flu pandemic.

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 9 of 16 The reports also raise questions about why Roche Holding AG, Tamiflu's maker, said it would take years for its rivals to copy the drug. In early October, with world-wide concern about bird flu spreading, the Swiss pharmaceutical company was under mounting pressure to allow other manufacturers to produce the antiviral drug as well. Roche resisted, saying Tamiflu -- widely considered the most effective drug in fighting avian influenza in humans -- was too difficult for other companies to manufacture. Roche even pointed to a potentially "explosive" chemical step in the production process and said repeatedly that it would take several years for anyone else to make Tamiflu. Yet even as Roche executives were warning of the rigors of the process, scientists at Taiwan's National Health Research Institutes and at Cipla Ltd., an Indian generic-drug manufacturer, had already finished reproducing Tamiflu, according to both entities. Both now say they can begin manufacturing the drug in far less time than Roche said it would take. "If they say they've produced oseltamivir [generic Tamiflu], they probably have," says David Reddy, head of pandemic planning for Roche. "We wouldn't doubt it." Roche says it had no intention of misleading people, and that high-quality mass production of the drug by others has yet to be accomplished. Mr. Reddy adds, however, that "making the drug at laboratory scale is vastly different than making it at commercial scale." Cipla and the Taiwanese government say that so far they have succeeded only in reproducing the drug in small quantities. Meanwhile, Roche has begun talks about licensing Tamiflu to other companies, and says more than 100 parties have contacted it expressing interest in making the drug. Scientists fear that the avian flu virus H5N1, which has occasionally passed from birds to humans, could mutate into a form that is readily transmitted from person to person, sparking a pandemic that could claim millions of lives. Governments around the world have despaired over having sufficient stockpiles of Tamiflu, even though there is no guarantee it will be effective against bird flu as the virus evolves. Without a proven vaccine, they have pinned their hopes on the antiviral drug as a first response to an outbreak. Why did Roche make its claims to begin with? "We painted as clear a picture as we could based on our information," Mr. Reddy says. He says the three-year estimate was based on discussions he and other Roche officials had with chemists and others within the company, and on how long it took Roche to get regulatory approval for the compound and to then make it in large quantities. He now concedes that those estimates may have been too cautious.

16. Pharmaceutical companies were told by Roch that their anti-viral drug Tamiflu would take approximately how long to replicate a. 18 days b. 3 years Correct c. 6 months d. 25 years

China's Logo Crackdown

BEIJING -- On the second floor of the Silk Street Market, Beijing's crowded counterfeit center, Xu Chao peddles knockoff Adidas, Mickey Mouse and Diesel T-shirts. But shoppers won't find fake versions of products bearing the 2008 Beijing Olympic Games logo at his stall or anywhere else at the market, a few steps from the U.S. Embassy. "The penalties for selling Olympic items are several times higher than for other brands," Mr. Xu says. The red logo of a running Olympian is the one brand peddlers of fakes can go to jail for stealing, he says. China is notorious as a knockoff haven, where poor law enforcement has turned a potentially huge consumer market into a land of 75-cent pirated DVDs and $10 fake Louis Vuitton handbags. Yet even amid growing consumer demand for 2008 Games trinkets, counterfeit Olympics goods are hard to find. Now, U.S. trade officials, business groups and intellectual-property lawyers want to know why the Chinese government can't make other counterfeit goods just as scarce.

17. In Beijing shoppers won't find fake versions of products bearing the a. 2008 Beijing Olympic Games logo Correct b. Nike logo c. Disney logo d. Adidas logo

Questions 18 – 23 from Money & Investing

How to Bargain for a House By RUTH SIMON October 29, 2005; Page B1 http://online.wsj.com/article/SB113054740621183194.html

Home buyers are finally starting to catch a break. After years of soaring real-estate prices -- not to mention periodic bidding wars for third- rate properties -- inventories of homes for sale are rising in many parts of the country. As a result, some buyers are regaining long-lost bargaining power. That gives buyers in many markets more room than they have had in years to push sellers to sweeten the pot. Buyers are asking for, and often getting, concessions ranging from help in paying their closing costs to money for repairs or redecorating. And sellers in many markets -- including once-hot areas like Phoenix, San Diego and Boston -- are finding that they can no longer just slap a price on their home and expect it to move quickly. Increasingly, they are being advised to set more realistic pricing expectations and to spruce up their property with fresh paint or some new plantings out front to stand out from the crowd.

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 11 of 16 18. Real-estate inventories of homes for sale are ______in many parts of the country. a. falling b. rising Correct c. stabilizing d. doubling

Many Internet Start-Ups Are Telling Venture Capitalists: 'We Don't Need You' By REBECCA BUCKMAN October 31, 2005; Page C1 http://online.wsj.com/article/SB113072135739183848.html

Internet start-ups and venture capitalists are back in vogue in Silicon Valley. But now the two don't necessarily go together. Consider Flickr, the innovative online-photo service launched by a small Canadian company early last year. Like many Web start-ups today, it was built on a dime: Husband-and-wife founders Stewart Butterfield and Caterina Fake used cheap software to construct the Flickr site, eschewing pricey computers. Some gear, such as computer storage, was "about 100 times cheaper" than it would have been even five years ago, says Mr. Butterfield. It cost only about $200,000 to pay salaries and get the site up and running, he says. By last year, several top venture-capital firms were clamoring to invest in Flickr through its parent company, Ludicorp Research & Development Ltd. In December, Mr. Butterfield had a funding offer from Accel Partners of Palo Alto, Calif. But the entrepreneur decided instead to sell to Internet giant Yahoo Inc. for what people familiar with the matter say was about $25 million, significantly higher than the value Accel had put on the company and Accel's proposed investment.

19. Many internet start-ups are telling venture capitalists a. 'we need your technology' b. 'we need you' c. 'we don't need you' Correct d. 'we need your people’

Credit-Card Firms Go for Small By ROBIN SIDEL November 1, 2005; Page C1 http://online.wsj.com/article/SB113080994041884863.html

Credit-card companies want to be nickeled-and-dimed by the nation's consumers. A decade after they began encouraging spenders to put everyday purchases on plastic, financial institutions now want people to use them for even smaller transactions. Known as "micropayments," these transactions typically are less than $2 and can ring up sizable industry profits even when they are less than a dollar.

20. Known as______these transactions typically are less than $2 and can ring up sizable industry profits even when they are less than a dollar.

No (Dollar) Gain Without Pain? By CRAIG KARMIN and YUKA HAYASHI November 2, 2005; Page C1 http://online.wsj.com/article/SB113090018575686024.html

The dollar is experiencing some of its biggest gains in years against the yen and other Asian currencies, lowering prices for Americans on many imports while threatening U.S. economic growth and reviving legislation aimed at protecting domestic manufacturers. A prolonged weak yen would have significant implications and perhaps even rekindle U.S.-Japan trade tensions. The weak yen could boost Japan's economy by making its products more competitive at the expense of U.S. companies, particularly the struggling auto industry, which is shedding assets and workers to cut costs. Toyota Motor is expected to see a boost of 5% to 10% to its profit just from the dollar's strength during the year ending in March.

21. A ______yen could boost Japan's economy by making its products more competitive at the expense of U.S. companies, particularly the struggling auto industry, which is shedding assets and workers to cut costs. a. climbing b. variable c. strong d. weak Correct

New Beginning for Newspapers? By JOSEPH T. HALLINAN and JOE HAGAN November 3, 2005; Page C1 http://online.wsj.com/article/SB113098763894087103.html

The potential sale of Knight Ridder Inc. might be the first shoe to drop in the long-talked- about consolidation of the newspaper industry. If so, somebody better deliver the news to prospective buyers. There don't seem to be many out there, at this point. Knight Ridder's biggest shareholder, Legg Mason Inc.'s Private Capital Management LP, this week called for the sale of the San Jose, Calif., company, the nation's second-largest publisher of daily newspapers by total circulation, behind Gannett Co. In a letter to the company's board, PCM Chief Executive Bruce Sherman said that Knight Ridder has determined that its breakup value far exceeds its stock price, and that directors should "aggressively pursue the competitive sale of the company." PCM owns a 19% stake in the company.

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 13 of 16 22. The potential sale of Knight Ridder Inc. might be the first shoe to drop in the long-talked-about consolidation of the ______industry. a. newspaper Correct b. mens shoes c. mens golf club d. golf ball

CEO Gives Fiat New Acceleration, But Can It Last? By GABRIEL KAHN November 4, 2005; Page C1 http://online.wsj.com/article/SB113107272331788172.html

TURIN, Italy -- Since he was named chief executive of Fiat Group 17 months ago, Sergio Marchionne has breathed life into a company many thought was headed to the junk heap. The Italian-born, Canadian-raised executive has sent underperforming managers packing, cut debt and pushed the stock price from its all-time low to a three-year high in September, though it has fallen some since then. Credit-rating companies have put Fiat on a positive outlook, and some analysts have issued "buy" recommendations on the stock.

23. Since he was named chief executive of ______17 months ago, Sergio Marchionne has breathed life into a company many thought was headed to the junk heap. a. ABC Group b. Dias Group c. Fiat Group Correct d. WM Group

Questions 24 – 26 from Personal Journal, Section D

Telecommuters May Face New Taxes By TOM HERMAN and RACHEL EMMA SILVERMAN November 1, 2005; Page D1 http://online.wsj.com/article/SB113081145979284900.html

A move by the Supreme Court means that many telecommuters could ultimately face higher income-tax bills. The nation's highest court yesterday declined to hear an appeal by a Tennessee man who telecommuted to New York and was charged by that state for taxes on all his income. Because the Supreme Court won't review his appeal, New York's decision stands. Many telecommuters could face higher state income-tax bills if other states are emboldened by New York's success and enact similar rules that tax out-of-state telecommuters. Some members of Congress already have introduced legislation to protect telecommuters from such taxes.

24. A move by the Supreme Court means that many telecommuters could ultimately face ______income-tax bills

A New Crop of Gadgets Challenge the BlackBerry By MARK HEINZL November 2, 2005; Page D1 http://online.wsj.com/article/SB113089021716585741.html

It's war on the BlackBerry. For years, competitors have tried to crack the dominance of that little wireless email gadget that seems to be lurking in pockets, brief cases and handbags of busy professionals everywhere. So far, its maker, Research In Motion Ltd., or RIM, has managed to fend off most rivals by focusing on security, reliability, good battery life and other basic functions. But competitors are redoubling their efforts to challenge the Blackberry, introducing an array of devices with beefed-up features. In the next few months, Nokia Corp., Palm Inc. and Motorola Inc. are planning to launch new or updated wireless email gadgets. Other big electronics makers, such as Samsung Electronics Co., Hewlett-Packard Co. and Siemens AG, also have strengthened wireless email in their latest products. Cingular Wireless LLC this week started selling H-P's new iPAQ hw6500 series Mobile Messenger for $399.99 with a two-year contract. RIM is firing back with a new BlackBerry that addresses some of the long-held gripes of BlackBerry users. The company says the new 8700c model it announced yesterday for Cingular's high-speed wireless network will provide faster Web browsing and speed up attachment viewing. It will be available Nov. 21 at a cost of $299.99 with a two-year service contract.

25. The Blackberry, that little wireless email gadget that seems to be lurking in pockets, brief cases and handbags of busy professionals everywhere is made by: a. Nokia b. Palm c. Research In Motion Ltd. Correct d. Motorola

Government to Relax Airport-Security Rules By LAURA MECKLER November 3, 2005; Page D1 http://online.wsj.com/article/SB113098163878586973.html

The federal government is preparing new rules that would allow travelers to bring items such as sharp knives and scissors onto airplanes, rolling back post-9/11 prohibitions that slow security lines and that many aviation experts say are no longer needed to protect aircraft. The changes are likely to be announced soon, though probably not before the busy Thanksgiving travel week, say people close to the discussions. The rules may be in place

© Copyright 2005 Dow Jones & Company, Inc. All rights reserved. WSJ Professor Guide: Page 15 of 16 before the start of the Christmas travel season, but no final decision has been made on timing. Changing the rules will require retraining some 45,000 airport screeners across the country, a process that has not yet begun, one person noted. The current, tougher screening rules were adopted soon after Sept. 11, 2001, when terrorists wielding box cutters hijacked four airplanes. The rules prohibit passengers from carrying through security a wide range of items that could conceivably be used as a weapon -- from screwdrivers and pointed cuticle scissors to butcher knives, swords and hatchets.

Last year, the federal Transportation Safety Administration confiscated more than seven million items at security gates. About 81,600 of those were firearms, explosives, box cutters or knives with blades over three inches -- suggesting the vast majority of the items collected were less dangerous. The list has been changed from time to time. This year, for example, the TSA banned lighters from aircraft. But corkscrews, once banned, are now are allowed on board.

26. Last year, the federal Transportation Safety Administration confiscated more than______items at security gates a. 100,000 b. 80 million c. 7 million Correct d. 15 million