Which of the Following Is True of the Dodd-Frank Act

question 48

Multiple Choice

Which of the following is true of the Dodd-Frank Act with regard to regulating executive compensation?

• A) Shareholders were allowed a nonbinding vote on executive compensation, as directed by the Federal Reserve.
• B) Company executives received lower compensation when firms sold mortgage-backed securities and derivatives.
• C) Companies cannot take back compensation if it is based on inaccurate accounting statements.
• D) Only independent directors of a company could sit on compensation committees of the board.

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Definitions:

Self-Effacing Bias

The tendency to downplay one's own success or attribute positive outcomes to external factors rather than to one's own efforts or abilities.

Rationalization Attribution

The process of explaining an individual's behavior with logical, but not always true, reasons to justify actions or opinions.

Self-Serving Bias

The common human tendency to attribute success to personal characteristics and failures to external factors, thereby protecting self-esteem.

Defensive Attribution

A cognitive bias where individuals attribute causes of accidents or misfortunes to external factors when involving others but to internal factors when it involves themselves, often to shield their ego.