To Reduce Possible Conflicts of Interest, the Investment Company Act

question 155

Multiple Choice

To reduce possible conflicts of interest, the Investment Company Act requires that boards of directors:

• A) be composed entirely of outsiders
• B) be composed of at least 40% outsiders
• C) be composed of at least 20% outsiders
• D) be composed entirely of corporate managers
• E) hire corporate attorneys to advise them on possible issues of conflicts of interest

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Definitions:

Public Expenditures

Money spent by the government on various services and projects for the public good.

Ability-to-Pay Principle

A principle in taxation that states taxes should be levied according to a taxpayer's ability to pay, typically implying higher taxes for those with higher income.

Tax Burdens

The total amount of tax payments borne by individuals or organizations, often discussed in terms of its impact on economic behavior or well-being.

Taxation Theory

Taxation Theory explores the underlying principles and effects of taxes on the economy, including how taxes impact consumer behavior, efficiency, and income distribution.