WorksheetsB&S Tutorial 8
Total questions: 10
Worksheet time: 3mins
Which of the following statements is NOT true about stockholders?
A. They are the legal owners of business corporations.
B. They own equal shares of company assets.
C. They are the part owners of the company.
D. Managers pay close attention to their needs and interests.
Institutional investors are sometimes referred to as:
A. Main Street investors.
B. Wall Street investors.
C. Inside investors.
D. Outside investors.
In 2008 and early 2009, share values declined sharply as the global economy fell into a severe recession. This type of stock market is referred to as a:
A. Bull market.
B. Volatile market.
C. Bear market.
D. None of the above.
The directors of a company are a central factor in corporate governance because they:
A. Exercise formal legal authority over company policy.
B. Have the highest stake in the performance of the company.
C. Have a moral responsibility to fulfill the needs of both the company’s employees and
customers.
D. Inherited the business from their predecessors.
Which of the following is NOT a function of board committees?
A. The executive committee works closely with top managers on business matters. .
B. The audit committee reviews the company’s financial reports.
C. The compensation committee administers and approves salaries and benefits.
D. The finance committee works closely with the human resources department to fund
employee salaries
Which if the following is not a legal right of stockholders?
A. To vote on members for the board of directors.
B. To vote on major mergers and acquisitions.
C. To vote on changes in the corporate charter and proposals.
D. To vote on who will become chief executive officer (CEO).
Which of the following is NOT an argument for high executive compensation?
A. High salaries provide an incentive for innovation and risk-taking.
B. High salaries are necessary to attract and retain top talent.
C. Inflated executive pay helps U.S. firms compete with foreign rivals.
D. Well-paid managers are being compensated for outstanding performance.
A reason for institutions becoming more assertive in promoting the interests of their member investors is:
A. It is difficult for institutions to sell their holdings.
B. Their members want them to.
C. Institutions have greater flexibility in selling stocks.
D. Institutions have nominated members on the finance committee of the board of
directors.
Which of the following is NOT an example of fulfilling social objectives through stock ownership?
A. Selling stock of companies that did business in South Africa when it had a policy of
racial discrimination.
B. Divesting from Chinese companies that made products using forced labor.
C. Selling stock of companies with a below-market rate of return.
D. Not investing in Burmese companies that had been accused of human rights abuses.
Which of the following is NOT an instance of “insider trading”?
A. An auditor using nonpublic information about the company to invest in its stock.
B. A marketing executive briefing stock analyst on the company’s sales performance.
C. The CEO’s cousin buying stock after the CEO mentioned a pending offer to buy the
company.
D. A stock broker passing an “inside tip” to a client, but not trading for his or her own
account.
