The Revised Act and the Majority of States Hold That

question 17

Multiple Choice

The Revised Act and the majority of states hold that the officers' and directors' test of the duty of diligence requires a director or officer to discharge her duties:

• A) in good faith.
• B) with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
• C) in a manner she reasonably believes to be in the best interests of the corporation.
• D) All of these.

---

Definitions:

Expected Market Rate

The anticipated rate of return that investors predict to receive from the market as a whole over a specific period.

Myopic Behavior

Short-sighted decision-making focusing on immediate benefits rather than considering long-term consequences, often seen in investment choices.

Mean-variance Optimizers

A mathematical process used in finance to construct an investment portfolio that aims to maximize returns for a given level of risk.

Portfolio Beta

A measure of the volatility, or systematic risk, of a portfolio of investments in comparison to the market as a whole.