Which of the following is the best way to prevent an agency problem between shareholders and managers?
A) Maintain a proportional relationship between a manager's bonus and the number of employees in the firm.
B) Compensate managers to a significant degree with shares of stock in their firm.
C) Reward managers if they keep costs below the budgeted amount.
D) Pay managers a bonus if their division exceeds its targeted market share.
E) Pay managers a bonus if their division exceeds its quarterly sales target.
B
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______ is a sense of peace and understanding that we experience when we stop blaming others for perceived wrongs.
A. Trust B. Forgiveness C. Honesty D. Interpersonal perception
A well-diversified portfolio includes investments in 50 securities. The portfolio's systematic risk is
likely to be about A) 50% of the total risk. B) 25% of the total risk. C) 40% of the total risk. D) zero because risk is eliminated with a portfolio of 50 securities or more.
Workers' compensation was created by the federal government to deal with problems of injured workers during the 1933 coal strikes
a. True b. False Indicate whether the statement is true or false
CIFiR's (SEC established Advisory Committee on Improvements to Financial Reporting) progress report proposes a framework for accounting judgments consisting of which two components?
A) Calibration and estimation. B) A critical and good-faith thought process and documentation. C) Heuristics and accounting risk. D) Professional accounting judgment and professional auditing judgment.