Which of the Following Is NOT Descriptive of Interlocking Directorates

question 42

Multiple Choice

Which of the following is NOT descriptive of interlocking directorates?

• A) Interlocking directorates occur because large firms have a large impact on other corporations.
• B) Interlocking directorates are more common in small, family-owned companies.
• C) Interlocking directorates are a useful method for gaining inside information about an uncertain environment.
• D) Interlocking directorates occur in about 20% of the 1000 largest US firms.
• E) Interlocking directorates provide objective expertise about a firm's strategy.

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Definitions:

Negotiability

Negotiability refers to the quality of a financial instrument that enables it to be transferred from one party to another in exchange for money or as payment.

Conditional Payment

A payment that is due only upon the occurrence of a specific event or satisfaction of a particular condition.

Mortgage

An agreement in which a bank or lender provides funds to a borrower at a certain interest rate, securing the loan by temporarily taking ownership of the borrower's property. This ownership is transferred back to the borrower once the loan is fully repaid.

Drawee

The party, typically a bank, on whom a check or draft is drawn and is responsible for paying the amount specified.