From Jerome Kerviel's Actions in Société Générale,we Realize That in a Business

question 19

Multiple Choice

From Jerome Kerviel's actions in Société Générale,we realize that in a business organization,managers may turn a blind eye to certain "red flags" in the system if

• A)the managers themselves conduct certain illegal activities.
• B)the managers know that at some point these illegal activities will fail.
• C)the managers believe that no worker will unnecessarily expose himself or herself.
• D)the managers embrace risk taking as long as it benefits the company.

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Definitions:

Equity Instrument

A type of financial security that signifies ownership in a company and represents a claim on part of the company's assets and earnings, such as stocks.

Market Participant

An entity or individual with the willingness and ability to buy, sell, or otherwise engage in transactions in a market.

Risk Aversion

The reluctance or avoidance of undertaking investment with uncertain outcomes, preferring outcomes that are more predictable.

Owner-Manager

An individual who both owns a significant part of a company and is actively involved in its management.