Which of the Following Statements Is TRUE with Respect to Risk

question 38

Multiple Choice

Which of the following statements is TRUE with respect to risk management and incorporation?

• A) Incorporation spreads the risk of liability because if one corporation becomes liable, every other corporation in the same province may be required to pay the debt.
• B) Incorporation reduces the risk of liability because the doctrine of limited liability usually means that a corporation's debts must be paid by the corporation and not by the people who run the corporation.
• C) Incorporation increases the risk of liability because a shareholder of a corporation is personally liable for all of the corporation's torts.
• D) Incorporation is irrelevant to risk management because corporations cannot be held liable
• E) Incorporation completely eliminates the risk of liability because the government is responsible for a corporation's debts.

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Definitions:

Frequent Comments

Regular or repeated verbal or written remarks that provide feedback, observations, or criticisms about a specific subject or activity.

Motives

The reasons or desires that drive an individual to act in a particular way.

Theory X Manager

Describes a management style that assumes employees are inherently lazy and need to be closely supervised and controlled.

Worker Involvement

The participation or engagement of employees in the decision-making processes and operations of their workplace.