Management Risk

Management Risk

University

8 Qs

quiz-placeholder

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Management Risk

Management Risk

Assessment

Quiz

Business, Professional Development, Other

University

Practice Problem

Medium

Created by

gbenga adamolekun

Used 25+ times

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8 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 2 pts

Which of the following is not an example of a principal-agent relationship

Shareholders and Board of Directors

Client and Solicitor

CEO and Market Regulator

Investors and Fund Managers

2.

MULTIPLE CHOICE QUESTION

30 sec • 2 pts

The main problem with agency problem is contrasting utility maximisation function, if the utility of the principal and agent can be expressed using the same function it mitigates the problem

True

False

3.

MULTIPLE CHOICE QUESTION

30 sec • 2 pts

All the following are components of executive compensation except

Base Salary

Annual Bonus

Severance pay

Use of corporate assets for personal matters

4.

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

All the following are problems with excessive reward except

Excessive Risk Taking

Pursuing corporate objectives with zeal and tenacity

Herd like behaviour

Over ambitious strategies

5.

MULTIPLE SELECT QUESTION

45 sec • 6 pts

The following are reasons shareholders are disinterested in managerial behaviour except

Benefits that accrue from managerial misbehaviour

Often shareholders are institutions

Protection of market liquidity

Dispersed shareholders have no power over decisions

6.

MULTIPLE CHOICE QUESTION

30 sec • 2 pts

The arguments on CEO pay and performance indicate that higher CEO remuneration often results in higher performance

True

FALSE

7.

MULTIPLE SELECT QUESTION

1 min • 6 pts

The decisions of management could have profound impact on the outcome of all stakeholders. The following are measures proposed to limit excessive CEO compensation and management risk

Enacting legislation that protect executive pay as well as pursuing tax policies that encourage excessive compensation

Increasing transparency by requiring the publication of all directors' salaries

Encouraging a wider range of people onto company boards, including academics, lawyers, public servants and those who have never served on a board before

Requiring all companies to introduce "clawback" policies, allowing them to recoup bonuses in cases where they are later shown to be unwarranted.

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