In 2000, American Energy, Commodities, and Services Company Enron Repeatedly

question 43

Multiple Choice

In 2000, American energy, commodities, and services company Enron repeatedly told investors to buy additional Enron stock or hold onto their existing shares. During this time, company executives were aware of hidden losses that were not known by the public and sold their shares of the company. Which of the following best describes Enron's actions during this time?

• A) Enron had a conflict of interest in that it gave investors information to help them earn more money.
• B) Enron lacked transparency in that it did not provide accurate financial information to customers and investors.
• C) Enron did not act in a socially responsible way.
• D) Enron competed fairly and honestly because it did not break any laws or regulations.

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Definitions:

Expected Rate

Typically refers to the anticipated return or performance of an investment over a specific period.

Risk-Free Asset

An investment with a certain return and virtually no risk of financial loss.

Expected Rate

The forecasted return rate on an investment over a specified period.

Standard Deviation

A statistical measure that represents the dispersion or variability of a set of data points or the distribution around the mean.