Graduate Management Admission Test (GMAT) — Questions and Answers

Question 1: In a multi-source reasoning question, Source 1 says a product has 20% market share, Source 2 says the total market is $500M. What is the product's estimated market value?

$100M (Correct answer)
$200M
$25M
$50M

Correct answer: $100M

20% of $500M = 0.20 × $500M = $100M.

Question 2: How does ethical decision-making apply to organizational leadership?

All decisions should consider legal compliance, stakeholder impact, and organizational values (Correct answer)
Ethics are irrelevant in business
Following the law is sufficient without ethical consideration
Ethics apply only to public-facing decisions

Correct answer: All decisions should consider legal compliance, stakeholder impact, and organizational values

Ethical decision-making requires considering legal compliance, stakeholder impact, and alignment with organizational values.

Question 3: What risk management principle applies to strategic planning?

Accept all risks without analysis
Transfer all risks to insurance
Proactively identify, assess, and mitigate risks through a structured framework (Correct answer)
Ignore risks until they become problems

Correct answer: Proactively identify, assess, and mitigate risks through a structured framework

Proactive risk management through structured identification, assessment, and mitigation is essential for business continuity.

Question 4: How is the AWA scored?

0 to 6 (Correct answer)
1 to 5
0 to 10
A to F

Correct answer: 0 to 6

The Analytical Writing Assessment (AWA) section of the GMAT is scored on a scale of 0 to 6, in half-point increments. Essays are evaluated by both a human reader and an automated essay-scoring engine, with the final score being the average of the two. This score reflects the overall quality of the analysis, organization, development, and language use in the essay.

Question 5: What is the primary role of a board of directors in corporate governance?

To handle customer complaints and service issues
To oversee management and represent shareholder interests (Correct answer)
To manage day-to-day operations of the company
To set prices for company products and services

Correct answer: To oversee management and represent shareholder interests

The board of directors acts as fiduciaries on behalf of shareholders, overseeing management rather than running daily operations.

Question 6: Which leadership approach best supports stakeholder management?

Avoiding all difficult decisions
Autocratic decision-making without input
Collaborative leadership that empowers team members and fosters innovation (Correct answer)
Delegating all responsibilities without oversight

Correct answer: Collaborative leadership that empowers team members and fosters innovation

Collaborative leadership that empowers team members drives engagement, innovation, and better outcomes.

Question 7: A Data Insights question asks: A store's profit margin is 15% and its revenue is $80,000. What is the profit?

$10,000
$8,000
$15,000
$12,000 (Correct answer)

Correct answer: $12,000

Profit = 15% × $80,000 = 0.15 × $80,000 = $12,000.

Question 8: What does 'shareholder activism' typically involve in corporate governance?

Shareholders filing class-action lawsuits against company management
Shareholders coordinating mass selling of shares to express displeasure
Shareholders organizing public boycotts of company products or services
Shareholders using their equity stakes to pressure companies to change strategy or governance (Correct answer)

Correct answer: Shareholders using their equity stakes to pressure companies to change strategy or governance

Shareholder activism involves investors leveraging their ownership positions to engage management and push for operational, financial, or governance changes they believe will create value.

Question 9: Which skill is tested by critical reasoning questions?

Grammar rules
Reading fluency
Logical evaluation (Correct answer)
Basic math

Correct answer: Logical evaluation

Critical Reasoning questions in the Verbal section specifically test your ability to logically evaluate arguments. This involves identifying assumptions, drawing inferences, assessing the strength or weakness of conclusions, and understanding the structure of short passages. It measures your capacity for analytical and logical thought, crucial for business decision-making.

Question 10: A multi-source reasoning passage states a project is 60% complete after 9 months. At this rate, how many total months will the project take?

15 months (Correct answer)
18 months
12 months
14 months

Correct answer: 15 months

If 60% takes 9 months, then 100% takes 9/0.60 = 15 months.

Question 11: What is the main strategy for data sufficiency questions?

Always use both statements
Guess based on context
Determine if data is enough (Correct answer)
Estimate the result

Correct answer: Determine if data is enough

The main strategy for Data Sufficiency questions is to determine whether the given statements provide sufficient information to answer the question, rather than actually solving the problem. You must evaluate each statement independently and then together to decide if the data is adequate. This approach saves time by avoiding unnecessary calculations.

Question 12: Which leadership approach best supports financial analysis?

Avoiding all difficult decisions
Collaborative leadership that empowers team members and fosters innovation (Correct answer)
Autocratic decision-making without input
Delegating all responsibilities without oversight

Correct answer: Collaborative leadership that empowers team members and fosters innovation

Collaborative leadership that empowers team members drives engagement, innovation, and better outcomes.

Question 13: In a GMAC graphics interpretation question, a pie chart shows that 35% of costs are labor. If total costs are $200,000, how much is spent on labor?

$75,000
$60,000
$65,000
$70,000 (Correct answer)

Correct answer: $70,000

35% of $200,000 = 0.35 × $200,000 = $70,000.

Question 14: How does ethical decision-making apply to financial analysis?

Ethics are irrelevant in business
Following the law is sufficient without ethical consideration
Ethics apply only to public-facing decisions
All decisions should consider legal compliance, stakeholder impact, and organizational values (Correct answer)

Correct answer: All decisions should consider legal compliance, stakeholder impact, and organizational values

Ethical decision-making requires considering legal compliance, stakeholder impact, and alignment with organizational values.

Question 15: A two-part analysis asks: If the probability of Event A is 0.4 and Event B is 0.5, and they are independent, what is P(A and B)?

0.90
0.45
0.20 (Correct answer)
0.10

Correct answer: 0.20

For independent events, P(A and B) = P(A) × P(B) = 0.4 × 0.5 = 0.20.

Question 16: How should performance be measured in stakeholder management?

Using balanced scorecards with multiple key performance indicators (Correct answer)
Relying on subjective impressions
Using a single financial metric
Measuring only when problems arise

Correct answer: Using balanced scorecards with multiple key performance indicators

Balanced scorecards with multiple KPIs provide a comprehensive view of performance across financial, customer, process, and learning dimensions.

Question 17: How much time is allotted for the AWA section?

45 minutes
25 minutes
20 minutes
30 minutes (Correct answer)

Correct answer: 30 minutes

Test takers are allotted 30 minutes to complete the Analytical Writing Assessment (AWA) section of the GMAT. This time frame requires efficient reading, critical analysis of the provided argument, and structured writing to develop a well-reasoned critique. Effective time management is crucial to ensure a comprehensive and coherent essay within the given limit.

Question 18: A GMAC table shows 4 product lines with the following net margins: P1=8%, P2=12%, P3=5%, P4=15%. Which has the highest net margin?

P4 (Correct answer)
P2
P1
P3

Correct answer: P4

Comparing 8%, 12%, 5%, and 15%, the highest is P4 at 15%.

Question 19: An argument concludes that a new drug is safe because no side effects appeared in a 2-week trial. The biggest flaw in this reasoning is:

The drug company funded the study
No placebo group was used
Side effects were self-reported
The trial was too short to detect long-term side effects (Correct answer)

Correct answer: The trial was too short to detect long-term side effects

Two weeks is insufficient to identify long-term or delayed side effects, making the safety conclusion premature.

Question 20: How should performance be measured in process improvement?

Using a single financial metric
Using balanced scorecards with multiple key performance indicators (Correct answer)
Measuring only when problems arise
Relying on subjective impressions

Correct answer: Using balanced scorecards with multiple key performance indicators

Balanced scorecards with multiple KPIs provide a comprehensive view of performance across financial, customer, process, and learning dimensions.

Question 21: Which of the following, if true, most weakens the argument: 'Since the city installed more streetlights, crime has dropped 20%. Therefore, streetlights reduce crime.'?

Crime dropped only in well-lit areas
Streetlights are expensive to maintain
The city also increased police patrols during the same period (Correct answer)
Residents reported feeling safer after the lights were installed

Correct answer: The city also increased police patrols during the same period

If police patrols also increased simultaneously, they could be the real cause of the crime drop, weakening the causal claim.

Question 22: What is meant by 'stewardship' as a corporate governance principle for institutional investors?

The long-term strategic planning process conducted by the board and executive team
The responsible oversight and engagement with investee companies on behalf of beneficial owners (Correct answer)
The management and maintenance of a company's physical assets and real estate
The internal hiring and professional development process for corporate management personnel

Correct answer: The responsible oversight and engagement with investee companies on behalf of beneficial owners

Stewardship refers to institutional investors' duty to actively monitor and engage with the companies they invest in, voting shares and advocating for governance practices that protect beneficial owners.

Question 23: What does the GMAT Quant section primarily assess?

Graphical interpretation
Creativity
Problem solving and data sufficiency (Correct answer)
Public speaking

Correct answer: Problem solving and data sufficiency

The GMAT Quant section primarily assesses a candidate's problem-solving abilities and their skill in data sufficiency. Problem Solving questions require you to calculate a specific answer, while Data Sufficiency questions test your ability to determine if enough information is provided to solve a problem, without necessarily solving it. Both types evaluate analytical and logical reasoning with numerical data.

Question 24: What risk management principle applies to process improvement?

Proactively identify, assess, and mitigate risks through a structured framework (Correct answer)
Accept all risks without analysis
Ignore risks until they become problems
Transfer all risks to insurance

Correct answer: Proactively identify, assess, and mitigate risks through a structured framework

Proactive risk management through structured identification, assessment, and mitigation is essential for business continuity.

Question 25: Which of the following, if true, most weakens: 'Remote work increases productivity, so our company should allow all employees to work remotely'?

Employees in roles requiring physical presence cannot work remotely (Correct answer)
Remote work reduces commuting stress
Studies show productivity gains of 13% for remote workers
Some employees prefer remote work

Correct answer: Employees in roles requiring physical presence cannot work remotely

If many roles require physical presence, the blanket policy of 'all employees' would be impractical, weakening the recommendation.

Question 26: What is the primary objective of financial analysis in professional practice?

Eliminating all business risks
Maximizing short-term profits only
Following competitor strategies exactly
Creating sustainable value for all stakeholders (Correct answer)

Correct answer: Creating sustainable value for all stakeholders

Financial Analysis aims to create sustainable value for all stakeholders including customers, employees, shareholders, and the community.

Question 27: In a GMAC Data Insights question, a table shows that Company A's revenue grew from $2M to $3M while Company B's grew from $5M to $7M. Which company had the higher percentage growth?

Company B
Company A (Correct answer)
Both grew equally
Cannot be determined

Correct answer: Company A

Company A grew 50% ($2M to $3M) while Company B grew 40% ($5M to $7M), making Company A's percentage growth higher.

Question 28: A graphics interpretation question shows that Region A has 1,200 units sold and Region B has 800 units sold. What is the ratio of Region A to Region B sales?

5:4
3:2 (Correct answer)
2:1
4:3

Correct answer: 3:2

1,200:800 simplifies by dividing both by 400 to give 3:2.

Question 29: What does the GMAT score represent in an MBA application?

Interview skills
Work experience
Extracurricular involvement
Academic aptitude (Correct answer)

Correct answer: Academic aptitude

The GMAT score represents a candidate's academic aptitude, specifically their analytical, quantitative, verbal, and integrated reasoning skills. Business schools use it as a standardized measure to assess an applicant's readiness for the rigorous academic demands of an MBA program. It provides an objective indicator of your potential to succeed in a graduate-level business curriculum.

Question 30: In a table analysis, you sort by 'profit margin' descending. Company X has revenue $500K and costs $425K. What is its profit margin?

16%
14%
15% (Correct answer)
17%

Correct answer: 15%

Profit = $500K − $425K = $75K; margin = $75K/$500K = 15%.

Question 31: A GMAC Data Insights scatter plot shows a strong positive correlation between advertising spend and sales. Which conclusion is best supported?

Lower sales cause lower ad spend
The data proves a causal relationship
Higher ad spend is associated with higher sales (Correct answer)
Higher ad spend causes higher sales

Correct answer: Higher ad spend is associated with higher sales

Correlation shown in a scatter plot indicates association, not causation.

Question 32: What is the primary objective of risk management in professional practice?

Maximizing short-term profits only
Eliminating all business risks
Creating sustainable value for all stakeholders (Correct answer)
Following competitor strategies exactly

Correct answer: Creating sustainable value for all stakeholders

Risk Management aims to create sustainable value for all stakeholders including customers, employees, shareholders, and the community.

Question 33: A GMAC graph shows sales data for Q1–Q4. Q1=$10K, Q2=$15K, Q3=$12K, Q4=$18K. What is the average quarterly sales?

$13,750 (Correct answer)
$14,000
$15,000
$13,500

Correct answer: $13,750

Average = (10+15+12+18)/4 = 55/4 = $13,750.

Question 34: What does an MBA interview usually assess?

Your job title
Your GPA
Your math skills
Your goals and communication skills (Correct answer)

Correct answer: Your goals and communication skills

An MBA interview is a critical component of the admissions process designed to assess an applicant's fit with the program and their potential for success. Interviewers evaluate clarity of career goals, motivation for pursuing an MBA, and crucial soft skills like communication, critical thinking, and interpersonal abilities. It's an opportunity for applicants to demonstrate their personality and articulate their vision beyond what's on paper.

Question 35: How should performance be measured in strategic planning?

Measuring only when problems arise
Relying on subjective impressions
Using balanced scorecards with multiple key performance indicators (Correct answer)
Using a single financial metric

Correct answer: Using balanced scorecards with multiple key performance indicators

Balanced scorecards with multiple KPIs provide a comprehensive view of performance across financial, customer, process, and learning dimensions.

Question 36: What does the 'agency problem' in corporate governance refer to?

Problems with marketing agencies hired by the firm
The difficulty of hiring qualified senior employees
The conflict of interest between managers and shareholders (Correct answer)
Regulatory disputes with government oversight agencies

Correct answer: The conflict of interest between managers and shareholders

The agency problem arises when managers (agents) pursue their own interests at the expense of shareholders (principals) who own the company.

Question 37: What key corporate governance disclosure requirement was introduced by the Dodd-Frank Act of 2010?

Mandating a minimum of 30% female representation on corporate boards
Prohibiting any executive from serving on the board of more than two public companies
Requiring all public companies to appoint an independent non-executive board chair
Requiring disclosure of the ratio of CEO pay to median employee compensation (Correct answer)

Correct answer: Requiring disclosure of the ratio of CEO pay to median employee compensation

The Dodd-Frank Act required publicly traded companies to annually disclose the ratio of their CEO's total compensation to the median annual total compensation of all other employees.

Question 38: 'Surveys show that employees are happiest at Company Z. Therefore, Company Z must have the best management practices.' The argument is weakest because:

Employee happiness may result from factors unrelated to management (Correct answer)
Company Z is a small company
Other companies were not surveyed
Surveys are always biased

Correct answer: Employee happiness may result from factors unrelated to management

Happiness could stem from pay, culture, location, or other factors, so attributing it solely to management is unwarranted.

Question 39: What role do institutional investors such as pension funds and mutual funds play in corporate governance?

They manage executive pension and benefits programs on behalf of the company's board
They serve as quasi-regulatory bodies overseeing compliance with securities laws
They provide credit facilities and loans to help corporations fund operations and expansion
They act as significant shareholders who can influence corporate strategy and governance through voting and engagement (Correct answer)

Correct answer: They act as significant shareholders who can influence corporate strategy and governance through voting and engagement

Institutional investors hold large equity stakes and exercise governance influence through proxy voting, direct engagement with management, and public advocacy for better governance practices.

Question 40: In corporate governance, what best describes the concept of 'checks and balances'?

A regulatory review confirming board members meet independence standards
A compensation system tying executive pay to balanced scorecards
A financial audit process ensuring accounting records are accurate
Distributing decision-making authority across multiple parties to prevent unchecked power (Correct answer)

Correct answer: Distributing decision-making authority across multiple parties to prevent unchecked power

Checks and balances in governance distribute authority among the board, management, auditors, and shareholders so that no single party can act without accountability to others.

Question 41: How long is the Quantitative section?

45 minutes
30 minutes
60 minutes
62 minutes (Correct answer)

Correct answer: 62 minutes

The GMAT Quantitative section is 62 minutes long. During this time, test-takers must answer 31 questions, which are a mix of Problem Solving and Data Sufficiency types. Effective time management is crucial to complete all questions accurately within the allotted time.

Question 42: What risk management principle applies to performance metrics?

Ignore risks until they become problems
Proactively identify, assess, and mitigate risks through a structured framework (Correct answer)
Accept all risks without analysis
Transfer all risks to insurance

Correct answer: Proactively identify, assess, and mitigate risks through a structured framework

Proactive risk management through structured identification, assessment, and mitigation is essential for business continuity.

Question 43: A GMAT Critical Reasoning argument states: 'All employees who meet their targets receive bonuses. Jane received a bonus.' Which conclusion is valid?

Jane may or may not have met her targets (Correct answer)
Jane met her targets
Jane exceeded her targets
Jane is the top performer

Correct answer: Jane may or may not have met her targets

The argument does not state that bonuses are given ONLY to employees who meet targets, so Jane could have received a bonus for another reason.

Question 44: What is a 'staggered board' (also called a classified board) structure in corporate governance?

A board that schedules meetings at irregular intervals throughout the year
A board where directors are ranked hierarchically by years of seniority
A board structure mandating equal representation of different stakeholder groups
A board where only a portion of directors stand for election each year (Correct answer)

Correct answer: A board where only a portion of directors stand for election each year

A staggered board divides directors into classes with only one class elected per year, making it much harder for activist investors or hostile acquirers to rapidly replace the entire board.

Question 45: A table-analysis question shows 5 departments with headcount: HR=10, Finance=25, IT=40, Sales=60, Ops=15. What percentage of total employees work in IT?

28.0%
26.7% (Correct answer)
25.0%
26.0%

Correct answer: 26.7%

IT has 40 out of 150 total employees (10+25+40+60+15), so 40/150 ≈ 26.7%.

Question 46: Which statement best describes 'corporate transparency' as a governance principle?

Providing clear, accurate, and timely disclosure of operations, financials, and material risks to stakeholders (Correct answer)
Publishing all internal communications and emails to prevent conflicts of interest
Requiring all employees to disclose compensation details to their colleagues
Allowing the general public and press to attend all board of directors meetings

Correct answer: Providing clear, accurate, and timely disclosure of operations, financials, and material risks to stakeholders

Corporate transparency requires companies to give stakeholders clear, accurate, and timely information about financial performance, material risks, and business operations needed to make informed decisions.

Question 47: What does 'double materiality' mean in the context of corporate governance disclosure?

The concept that companies must report both financial impacts on the firm and the firm's impacts on society (Correct answer)
A rule that all material information must be disclosed in two separate regulatory filings
Requiring disclosures to be independently reviewed by two separate audit firms
The requirement that board resolutions need approval from two-thirds of directors to pass

Correct answer: The concept that companies must report both financial impacts on the firm and the firm's impacts on society

Double materiality holds that companies must disclose how ESG issues create financial risks for the company AND how the company's activities affect the environment and society.

Question 48: In a GMAC data sufficiency-style question: Is integer n divisible by 6? Statement 1: n is divisible by 3. Statement 2: n is divisible by 2. Are the two statements together sufficient?

Yes, together they are sufficient (Correct answer)
Statement 2 alone is sufficient
No, neither alone is sufficient
Statement 1 alone is sufficient

Correct answer: Yes, together they are sufficient

Divisibility by both 2 and 3 is necessary and sufficient for divisibility by 6.

Question 49: What risk management principle applies to stakeholder management?

Ignore risks until they become problems
Proactively identify, assess, and mitigate risks through a structured framework (Correct answer)
Accept all risks without analysis
Transfer all risks to insurance

Correct answer: Proactively identify, assess, and mitigate risks through a structured framework

Proactive risk management through structured identification, assessment, and mitigation is essential for business continuity.

Question 50: Which document explains your goals and why you're applying?

Reference letter
Transcripts
Resume
Statement of purpose (Correct answer)

Correct answer: Statement of purpose

The Statement of Purpose (also known as an admissions essay or personal statement) is the document where you explain your career goals and articulate why you are applying to a specific program. It allows you to showcase your motivations, aspirations, and how your experiences align with the program's offerings. This essay is crucial for demonstrating your fit and communication skills.

Question 51: A GMAT boldface Critical Reasoning question labels one sentence as the 'main conclusion.' Which role does the boldface sentence play if it begins with 'Therefore'?

It is a counterargument
It is background information
It is the main conclusion (Correct answer)
It is a supporting premise

Correct answer: It is the main conclusion

'Therefore' is a conclusion indicator word, signaling that the sentence is the main conclusion drawn from preceding premises.

Question 52: A two-part analysis question presents: If x > 0 and y > 0, and x/y = 0.75, what is y/x?

0.75
1.33 (Correct answer)
1.50
1.25

Correct answer: 1.33

If x/y = 0.75 = 3/4, then y/x = 4/3 ≈ 1.33.

Question 53: What is tested in the Quantitative section of the GMAT?

Advanced calculus
Statistics only
Algebra, geometry, and arithmetic (Correct answer)
Physics and chemistry

Correct answer: Algebra, geometry, and arithmetic

The GMAT Quantitative section tests fundamental mathematical concepts typically covered in high school, specifically focusing on algebra, geometry, and arithmetic. It assesses a candidate's ability to solve problems and analyze data using these core mathematical principles. It does not include advanced calculus or specialized scientific fields.

Question 54: What should be avoided in the AWA essay?

Personal opinions (Correct answer)
Use of transitions
Sticking to the prompt
Objective tone

Correct answer: Personal opinions

The AWA is an 'Analyze an Argument' task, which requires an objective evaluation of the given argument's logical soundness. Introducing personal opinions or beliefs detracts from this objective analysis, as the goal is to critique the argument's structure and evidence, not to agree or disagree with its premise. Maintaining an objective tone is crucial for demonstrating analytical rigor.

Question 55: How does ethical decision-making apply to strategic planning?

Following the law is sufficient without ethical consideration
All decisions should consider legal compliance, stakeholder impact, and organizational values (Correct answer)
Ethics apply only to public-facing decisions
Ethics are irrelevant in business

Correct answer: All decisions should consider legal compliance, stakeholder impact, and organizational values

Ethical decision-making requires considering legal compliance, stakeholder impact, and alignment with organizational values.

Question 56: How does ethical decision-making apply to stakeholder management?

Ethics are irrelevant in business
Following the law is sufficient without ethical consideration
Ethics apply only to public-facing decisions
All decisions should consider legal compliance, stakeholder impact, and organizational values (Correct answer)

Correct answer: All decisions should consider legal compliance, stakeholder impact, and organizational values

Ethical decision-making requires considering legal compliance, stakeholder impact, and alignment with organizational values.

Question 57: Which of the following is a question type in Integrated Reasoning?

Sentence correction
Multi-source reasoning (Correct answer)
Reading comprehension
Critical reasoning

Correct answer: Multi-source reasoning

Multi-source reasoning is one of the four distinct question types found in the Integrated Reasoning section, alongside Table Analysis, Graphics Interpretation, and Two-Part Analysis. This specific type requires you to evaluate information from two or three different sources, such as text passages, tables, or charts, to answer a series of questions. It directly tests your ability to synthesize disparate information.

Question 58: Which leadership approach best supports risk management?

Autocratic decision-making without input
Collaborative leadership that empowers team members and fosters innovation (Correct answer)
Avoiding all difficult decisions
Delegating all responsibilities without oversight

Correct answer: Collaborative leadership that empowers team members and fosters innovation

Collaborative leadership that empowers team members drives engagement, innovation, and better outcomes.

Question 59: What is the main purpose of the Integrated Reasoning section?

Measure grammar usage
Assess speaking skills
Test memory recall
Analyze complex information from multiple sources (Correct answer)

Correct answer: Analyze complex information from multiple sources

The main purpose of the Integrated Reasoning (IR) section is to assess your ability to analyze and synthesize complex information presented in various formats from multiple sources. This skill is crucial in today's business environment, where managers frequently encounter diverse data sets and must draw informed conclusions. It tests your capacity to integrate different types of information to solve problems.

Question 60: What kind of data might you see in the IR section?

Audio clips
Graphs and tables (Correct answer)
Video presentations
Animations

Correct answer: Graphs and tables

In the IR section, you will frequently encounter data presented in visual and structured formats such as graphs and tables. These are used to test your ability to interpret, analyze, and synthesize quantitative and qualitative information from various sources. This simulates real-world business scenarios where data often comes in these visual forms.

Question 61: Which of the following is an example of an 'appeal to authority' fallacy in a GMAT argument?

A survey of 500 customers shows high satisfaction
A study with 10,000 participants shows the drug is effective
A celebrity endorses a financial product as safe without financial expertise (Correct answer)
An economist predicts a recession based on GDP data

Correct answer: A celebrity endorses a financial product as safe without financial expertise

Citing a celebrity—who lacks financial expertise—as evidence of safety is an appeal to irrelevant authority.

Question 62: What is 'CEO duality' in the context of corporate governance?

When the same person serves as both CEO and Chairman of the Board (Correct answer)
When a CEO has dual reporting lines to the board and investors
When two co-CEOs share equal leadership responsibilities
When a CEO simultaneously holds positions at two separate companies

Correct answer: When the same person serves as both CEO and Chairman of the Board

CEO duality occurs when one individual holds both the CEO and Chairman of the Board positions, concentrating power and potentially reducing independent oversight.

Question 63: A two-part analysis question: A company's costs increased 20% and revenue increased 25%. If original profit margin was 10%, did the absolute profit increase?

Cannot be determined without exact figures
No, it decreased
Yes, it increased (Correct answer)
It stayed the same

Correct answer: Yes, it increased

With proportional increases where revenue grows faster than costs, absolute profit increases.

Question 64: A two-part analysis asks you to determine if a dataset's median is less than its mean. Given values 2, 3, 3, 4, 18, what is the median?

18
4
2
3 (Correct answer)

Correct answer: 3

When the five values are sorted (2,3,3,4,18), the middle (third) value is 3, which is the median.

Question 65: In a multi-source reasoning question, one email states a shipment arrives Friday; a memo says processing takes 2 business days. If Friday is Day 1 of processing, what is the earliest completion day?

Sunday
Tuesday (Correct answer)
Monday
Saturday

Correct answer: Tuesday

Friday is Day 1 and Monday is Day 2 of business processing, so completion is end of Monday — earliest availability is Tuesday.

Question 66: What is the typical duration of an MBA program?

2 years (Correct answer)
6 months
4 years
1 year

Correct answer: 2 years

The traditional full-time MBA program in the United States and many other countries is designed to be completed over two academic years. This duration allows students to gain a comprehensive understanding of business fundamentals, specialize in areas of interest, and often complete an internship between their first and second years. While one-year and executive MBA programs exist, two years is the most common and widely recognized duration for a full-time MBA.

Question 67: How should performance be measured in risk management?

Using a single financial metric
Relying on subjective impressions
Measuring only when problems arise
Using balanced scorecards with multiple key performance indicators (Correct answer)

Correct answer: Using balanced scorecards with multiple key performance indicators

Balanced scorecards with multiple KPIs provide a comprehensive view of performance across financial, customer, process, and learning dimensions.

Question 68: 'Either we increase the marketing budget or sales will decline.' Which assumption does this argument rely on?

No other factors can prevent a sales decline (Correct answer)
Increasing the budget guarantees sales growth
Sales have already been declining
Marketing is the only department with a budget

Correct answer: No other factors can prevent a sales decline

The either/or structure assumes no other action (like improving the product or cutting price) could maintain sales.

Question 69: Which leadership approach best supports business ethics?

Autocratic decision-making without input
Collaborative leadership that empowers team members and fosters innovation (Correct answer)
Delegating all responsibilities without oversight
Avoiding all difficult decisions

Correct answer: Collaborative leadership that empowers team members and fosters innovation

Collaborative leadership that empowers team members drives engagement, innovation, and better outcomes.

Question 70: Which of the following best strengthens the argument: 'Employees who work from home are more productive than those in the office'?

Home workers save commute time
Home workers have fewer meetings
A study shows home workers complete 13% more tasks per day (Correct answer)
Some employees prefer the office environment

Correct answer: A study shows home workers complete 13% more tasks per day

Empirical data showing higher task completion directly supports the productivity claim.

Question 71: A plan to improve employee retention proposes increasing salaries. A critic argues that employees leave primarily due to poor management, not pay. Which type of argument does the critic make?

Attacking the root cause assumption (Correct answer)
Ad hominem
False analogy
Straw man

Correct answer: Attacking the root cause assumption

The critic challenges the assumption that pay is the main driver of turnover, suggesting the plan targets the wrong cause.

Question 72: How does ethical decision-making apply to process improvement?

Ethics apply only to public-facing decisions
Following the law is sufficient without ethical consideration
Ethics are irrelevant in business
All decisions should consider legal compliance, stakeholder impact, and organizational values (Correct answer)

Correct answer: All decisions should consider legal compliance, stakeholder impact, and organizational values

Ethical decision-making requires considering legal compliance, stakeholder impact, and alignment with organizational values.

Question 73: Who usually writes letters of recommendation?

Classmates
Friends
Professional or academic mentors (Correct answer)
Family members

Correct answer: Professional or academic mentors

Letters of recommendation for graduate programs like an MBA are typically written by individuals who can speak to an applicant's professional or academic capabilities, work ethic, and potential. These are usually supervisors, professors, or senior colleagues who have directly observed the applicant's performance and can provide credible, objective insights into their qualifications. Family members, friends, or classmates generally lack the professional distance and authority to offer such a perspective.

Question 74: What communication strategy is most effective for risk management?

Limit communication to written memos only
Communicate only when required by policy
Use technical jargon to demonstrate expertise
Maintain transparent, timely, and audience-appropriate communication (Correct answer)

Correct answer: Maintain transparent, timely, and audience-appropriate communication

Transparent, timely, and audience-appropriate communication builds trust and ensures alignment among stakeholders.

Question 75: Which financial document is often part of the admissions process?

Credit score
Tax return of parents
Social media profiles
Bank statements or aid applications (Correct answer)

Correct answer: Bank statements or aid applications

Financial documents like bank statements or aid applications are often required during the MBA admissions process to demonstrate an applicant's ability to cover tuition and living expenses. This is particularly important for international students who need to prove sufficient funds for visa purposes, and for all applicants seeking financial aid or scholarships. These documents help universities assess financial viability and allocate resources appropriately.

Question 76: A GMAC Data Insights question shows a bar chart where sales increased by 10% each year for 3 years starting at $100K. What are sales in year 3?

$110,000
$130,000
$121,000
$133,100 (Correct answer)

Correct answer: $133,100

Year 1: $110K, Year 2: $121K, Year 3: $133,100 after compounding 10% annually three times.

Question 77: 'City X banned plastic bags, and plastic bag litter in City X decreased by 40%. Other cities should ban plastic bags too.' Which of the following, if true, most strengthens this argument?

Residents found paper bags inconvenient
City X also increased fines for littering
Similar bans in other cities produced comparable litter reductions (Correct answer)
Plastic bags are cheap to produce

Correct answer: Similar bans in other cities produced comparable litter reductions

Evidence that similar interventions produced similar results in other cities strengthens the generalization.

Question 78: Which leadership approach best supports performance metrics?

Collaborative leadership that empowers team members and fosters innovation (Correct answer)
Autocratic decision-making without input
Delegating all responsibilities without oversight
Avoiding all difficult decisions

Correct answer: Collaborative leadership that empowers team members and fosters innovation

Collaborative leadership that empowers team members drives engagement, innovation, and better outcomes.

Question 79: Why is work experience important for MBA admissions?

To skip the GMAT
To enhance career transition (Correct answer)
To shorten the program
To meet age requirements

Correct answer: To enhance career transition

Work experience is crucial for MBA admissions because it demonstrates an applicant's practical business understanding, leadership potential, and ability to contribute to classroom discussions. It helps students leverage the MBA curriculum to pivot into new industries or roles, as the program builds upon existing professional foundations rather than starting from scratch. This experience is vital for making a successful career transition post-MBA.

Graduate Management Admission Test (GMAT)

The GMAT is a standardized exam designed to assess analytical, writing, quantitative, verbal, and reading skills for admission to graduate management programs.

Questions

135 min

Time Limit

50%

To Pass

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Exam Rules

You can skip questions and return to them later
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No feedback shown until you submit the entire exam
Unanswered questions count as wrong — answer everything
10 pretest questions are mixed in and don't affect your score
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