The Scandals Involving Enron, World Com, Global Crossing and Other

question 80

Multiple Choice

The scandals involving Enron, World Com, Global Crossing and other large firms:

• A) are examples of asymmetric information and have led, at least temporarily, to a less well functioning stock market.
• B) is what should have been expected on the part of investors, that is why there is a risk premium.
• C) have resulted in a cry for less government regulation of public corporations.
• D) demonstrate that the government should be responsible for collecting and distributing financial information on firms.