Directors Who Are Not as Directly Connected to the Firm

question 42

Multiple Choice

Directors who are not as directly connected to the firm but who have existing or potential business relationships with the firm are called:

• A)gray directors.
• B)independent directors.
• C)advising directors.
• D)inside directors.

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Definitions:

Financial Asset

A financial asset refers to any asset that is cash, a contractual right to receive cash or another financial asset from another entity, or a contractual right to exchange financial instruments with another entity under conditions that are potentially favorable.

Claim

A demand for something as due, often referring to a right to payment or other benefits.

Interest Rate Collar

A financial derivative strategy used to hedge interest rate movements by setting upper and lower limits on interest payments.

Variable Rate Loan

A loan where the interest rate can change over time, based on an underlying benchmark or index.