Product Diversification Provides Two Benefits to Managers That Do Not

question 124

Multiple Choice

Product diversification provides two benefits to managers that do not accrue to shareholders: __________ and __________.

• A) greater experience in a wider range of industries; lessening of managerial employment risk
• B) the manager frequently invests in the acquired firm, which allows him or her extensive profits; the manager can frequently buy excess assets divested by the acquired firm
• C) the manager's supervisory needs are lowered; the manager is allowed greater time to oversee a wider range of activities
• D) the opportunity for higher compensation through firm growth; a reduction in managerial employment risk

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Definitions:

Sample Size

The number of observations or replicates included in a statistical sample.

Significance Level

The threshold for rejecting the null hypothesis, representing the probability of committing a Type I error if the null hypothesis is actually true.

One-Tailed Test

A statistical test where the region of rejection is on only one side of the sampling distribution, used when testing for a direction in the relationship between variables.

Critical Value

A threshold value that defines the boundary or cut-off point beyond which an observed test statistic is considered statistically significant.