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:

Hemispheric Activity

The functioning or activity level of the brain's two hemispheres, often discussed in terms of differences in cognitive processing or emotional response.

Depression

A mental health disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Temperament

Refers to the innate aspects of an individual's personality, such as their disposition or emotional nature, which is often thought to be present from birth.

Intelligence

The capacity for logic, understanding, self-awareness, learning, emotional knowledge, reasoning, planning, creativity, critical thinking, and problem-solving.