Because Directors Are Supposed to Represent Shareholders' Interests, Directors Have

question 13

Multiple Choice

Because directors are supposed to represent shareholders' interests, directors have all these duties EXCEPT:

• A)Fiduciary duty
• B)Duty of care
• C)Duty of auditing
• D)Duty of loyalty and fair dealing
• E)Directors have all of the above duties.

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Definitions:

Productive Efficiency

A situation in which a firm or economy produces goods at the lowest possible cost, utilizing all available resources efficiently.

Allocative Efficiency

A state of the market where resources are allocated in a way that maximizes total consumer and producer surplus.

Oligopolistic Industry

A market structure characterized by a small number of firms dominating the industry, leading to limited competition.

Collude

To cooperate or conspire, especially in a secretive way, with others to deceive or cheat.