Johnson and Johnson Recently Realized That at Least 1,000 Lots

question 42

Multiple Choice

Johnson and Johnson recently realized that at least 1,000 lots of products specifically children's medication Tylenol,Motrin,Zyrtec and Benadryl contained too high a concentration of their active ingredient.In order to behave ethically,Johnson and Johnson should:

• A) continue production and sale of the products while investigating.
• B) delay further production until the issue is identified.
• C) recall defective products that have been sold.
• D) delay further production until the issue is identified and recall defective products already sold.
• E) sell the products,but with a warning label suggesting that smaller doses be taken.

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Definitions:

Priced Factor

An element affecting the pricing of securities that is reflected in market prices due to its influence on asset returns.

Market Illiquidity

A situation in which an asset cannot be easily sold or exchanged for cash without a substantial loss in value.

Book-to-market Ratio

A valuation metric comparing the book value of a company to its market price.

Momentum

An investment strategy that involves buying securities that have had high returns over a certain period and selling those that have had poor returns, based on the belief that trends will continue.