Which One of the Following Statements Is TRUE

question 30

Multiple Choice

Which one of the following statements is TRUE?

• A) A corporate executive health club is an example of a nonpecuniary benefit.
• B) When lenders protect themselves from the risk of asset switching by raising the interest rate, the firm's WACC can decrease.
• C) A lender calling in a corporate loan and then lending the funds out to a safer borrower is an example of asset switching.
• D) A supplier substituting a lower-quality raw material without approval is an example of asset switching.
• E) An agency problem occurs when an owner/manager sells stock to an outside investor and the owner/manager fears the outside investor will consume too many perquisites.
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Definitions:

Schizophrenia

A chronic brain disorder characterized by delusions, hallucinations, disorganized speech, and significant impairment in daily functioning.

Avoidance/Avoidance

A decision-making conflict where an individual has to choose between two equally unattractive options, often leading to anxiety or stress.

Approach/Approach

A decision-making conflict situation where an individual must choose between two equally appealing options.

Approach/Avoidance

Psychological concepts that describe an individual's motivation to move towards or away from a particular stimulus or situation.