Which of the Following Statements Is Incorrect

question 24

Multiple Choice

Which of the following statements is incorrect?

• A) Codes of conduct incorporating ethical standards are generally reactive, whereas laws are often proactive.
• B) Disqualifying directors from managing corporations is one way in which the law deals with conduct which is unethical.
• C) Accepting a secret commission is unethical behaviour.
• D) Offering a secret commission to an agent is unethical behaviour.

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Definitions:

Outstanding Shares

Shares of a corporation's stock that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Homemade Dividends

A concept whereby investors create their own dividend policy by selling a portion of the shares they own to generate cash, rather than relying on company-issued dividends.

Financial Engineering

The use of mathematical techniques and models to solve financial problems or to create financial products.

Stripped Common Shares

Common shares from which certain rights have been removed, typically dividends or voting rights, often used in structured finance transactions.