Although There Are Clear Differences Between Management and Leadership

question 84

Multiple Choice

Although there are clear differences between management and leadership,

• A) There is little research to support one or the other
• B) Leadership is more valued than management
• C) The two constructs overlap
• D) Management is more valued than leadership

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Definitions:

Risk Aversion

The reluctance of a person or entity to take risks.

Expected Returns

The projected return on an investment, taking into account both the probability and the impact of known risks.

Risky Securities

Financial instruments that carry a high degree of investment risk due to their significant exposure to market volatility.

Diversifiable Risk

The risk that a borrower will not pay theinterest and/or principal on a loan as it becomes due. Ifthe issuer defaults, investors receive less than the promised return on the bond. Default risk is influenced byboth the financial strength of the issuer and the terms ofthe bond contract, especially whether collateral has beenpledged to secure the bond. The greater the default risk,the higher the bond’s yield to maturity.