One Method of Preventing or Reducing the Chance That Corporate

question 95

Multiple Choice

One method of preventing or reducing the chance that corporate management will harm the bondholders to the benefit of the stockholders is to:

• A) require that key executives own a certain percentage of the firm's outstanding stock
• B) require that key executives own a certain percentage of the firm's outstanding bonds
• C) write detailed covenants into bond contracts.
• D) all of the above are acceptable methods

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Definitions:

Functional Analysis

An assessment strategy in behavior therapy that identifies antecedents, behaviors, and consequences to understand and address problematic behaviors.

Contingency Management

A behavioral therapy technique that modifies behavior by changing the consequences of that behavior, often through rewards or punishments aimed at increasing or decreasing certain behaviors.

Stimulus Control

A behavioral intervention technique to limit exposure to cues that trigger undesirable behaviors.

Biofeedback

A technique that teaches individuals to control physiological processes such as heart rate, muscle tension, and brainwave patterns, through real-time feedback from monitoring devices.