Management Myopia Occurs When Managers

question 28

Multiple Choice

Management myopia occurs when managers

• A)lack motivation to reach their performance targets and in turn find it difficult to motivate subordinates.
• B)limit their focus to short-term profits at the expense of longer-term strategic obligations.
• C)find themselves unable to rise beyond a certain level in the organizational hierarchy.
• D)are promoted beyond their level of competence.
• E)find it hard to progress within an organization due to corporate downsizing or paring of middle management layers.

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Definitions:

Zero Coupon Bonds

Pay no coupons at all, but are offered at a substantial discount below their par value and hence provide capital appreciation rather than interest income. Sometimes referred to as “stripped bonds.”

Callable Bond

A bond that can be redeemed by the issuer before its maturity date at a specified call price.

Income Bonds

Bonds that pay interest only when the issuer has sufficient earnings, providing a variable income stream based on the issuer's profitability.

Yield to Maturity

The total return anticipated on a bond if it is held until the date it matures, reflecting interest and price appreciation.