A Board of Directors Should Not

question 50

Multiple Choice

A board of directors should not: 

• A) have members with unlimited terms.
• B) have an odd number of members.
• C) be comprised of external advisors.
• D) be compensated with anything other than stock.

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Definitions:

Arbitrage Opportunities

Situations in which it is possible to simultaneously buy and sell assets in different markets or in different forms to benefit from price differences without risk.

Nominal Risk-free Rate

The interest rate on a risk-free security that does not account for inflation.

Purchasing Power Parity

An economic theory that states that the exchange rate between two currencies is equal to the ratio of the currencies' respective purchasing power.

Relative Purchasing

The comparison of the purchasing power of various currencies against goods and services, adjusting for their price differences in different countries.