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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Administrative Law Judge

A judge who makes decisions on disputes within the federal, state, or local regulatory agencies.

Administrative Hearing

A legal proceeding before a government agency or administrative law judge involving the rights, duties, obligations, or privileges of specific parties.

FTC Commissioner

An official appointed to the Federal Trade Commission who has a role in enforcing antitrust and consumer protection laws in the United States.

Federal District

A division within a nation, often specifically a national capital district, governed directly by the federal government.