Which of the Following Statements About the Influence of Large

question 29

Multiple Choice

Which of the following statements about the influence of large shareholders is (are) true?

• A)Institutional investors, such as mutual funds, exert control over management, and small, retail shareholders benefit.
• B)Most large institutional shareholders avoid actively seeking corporate influence in order to avoid insider trading violations.
• C)Of the large institutional investors, only public pension funds tend to exert control over management to the benefit of small, retail shareholders.
• D)Both B and C are true statements.

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Definitions:

Confirmation Bias

The tendency to interpret new evidence as confirmation of one's existing beliefs or theories.

Multitasking

The performance of multiple tasks simultaneously by an individual or machine.

Framing Effect

The influence on decision making caused by the way information is presented, rather than by the information itself.

Confirmation Bias

The inclination to seek out, understand, prioritize, and remember data in a manner that supports one's already established views or theories.