Most Companies Are Unlikely to Intentionally Provide Shoddy, Harmful, or Unsafe

question 122

Multiple Choice

Most companies are unlikely to intentionally provide shoddy, harmful, or unsafe products because ________.

• A) they won't face liability lawsuits and expensive awards for damages
• B) they want to develop long-term relationships with their customers
• C) they know that customers will shrug off errors for a while
• D) they are confident they can appease consumer groups and regulators
• E) it costs more to provide quality products

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Definitions:

Loan Loss Provisions

Reserves set aside by financial institutions to cover potential losses on loans.

Capital Adequacy Ratio

A measure of a bank's capital, used to protect depositors and promote the stability and efficiency of financial systems by ensuring banks can absorb a reasonable amount of loss.

Loan Charge-Offs

Represents the amount of debt that a bank or lender determines cannot be collected after a debtor's default.

Long-Term Incentive

Incentive plans designed to improve employees' long-term performance and retention, typically including options, restricted stock, and performance plans.