Which of the Following Statements Is True of Section 407

question 1

Multiple Choice

Which of the following statements is true of Section 407 of the Sarbanes-Oxley Act?

• A)It mandates that all members of a public company audit committee must be independents.
• B)It requires that management file an internal control report with its annual report each year.
• C)It addresses the disclosure of audit committee financial expert.
• D)It outlines the codes of ethics for senior financial officers.

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Definitions:

Relevant Risk

The portion of an investment's risk that cannot be eliminated through diversification, also known as systematic or market risk.

Market Portfolio

A theoretical portfolio of all assets in the market, with each asset weighted according to its market capitalization.

Efficient Frontier

A concept in modern portfolio theory which represents a set of optimal portfolios that provide the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.

Indifference Curve

A curve connecting all portfolios with the same utility according to their means and standard deviations.