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:

Audit

A systematic examination of books, accounts, documents, and vouchers of an organization to ascertain how far the financial statements present a true and fair view.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.