Which of the Following Statements Is True Regarding the Composition

question 71

Multiple Choice

Which of the following statements is true regarding the composition of the board of directors?

• A) CEOs often favor significant representation by board outsiders.
• B) Institutional investors favor people who have intimate knowledge of the firm's business affairs.
• C) Making the CEO the chairman of the board of directors helps avoid bitter divide within a corporation.
• D) CEOs often favor the use of people who have intimate knowledge of the firm's business affairs.
• E) Significant representation by board outsiders increases the potential for CEO duality.

---

Definitions:

Workers

Individuals engaged in a professional or labor activity to earn wages or salaries.

Average Total Costs

The total cost of production divided by the number of units produced, representing the average cost per unit.

Physical Capital

Tangible assets used in the production of goods and services, such as machinery, buildings, and equipment.

Short Run

A period in economics during which at least one input is fixed while others are variable.