Which of the Following Statements Is NOT a Reason for Companies

question 8

Multiple Choice

Which of the following statements is NOT a reason for companies to actively manage risks?

• A)Firms generally have lower transactions costs due to a larger volume of hedging activities.
• B)Nowadays most investors hold well-diversified portfolios.
• C)Managers know more about the firm's risk exposure than outside investors due to asymmetric information.
• D)Firms are more likely to have specialized skills and knowledge required for effective risk management.

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Definitions:

Suicide's Unpredictability

The aspect of suicidal behavior that makes it difficult to predict when someone might attempt to take their own life.

Psychological Disorder

A series of psychological or behavioral symptoms that negatively affect several aspects of an individual's life, causing them discomfort.

Violent Crime

Criminal activities that involve force or the threat of force against individuals, including acts like murder, assault, and robbery.

Mentally Ill

Refers to a wide range of mental health conditions that affect mood, thinking, and behavior.