Which of the Following Statements Is False

question 24

Multiple Choice

Which of the following statements is false?

• A) The conflict of interest between managers and investors derives from the separation of ownership and control in a corporation.
• B) Any discussion of corporate controls-the system of controls, regulations, and incentives designed to prevent fraud-is a story of conflicts of interest and attempts to minimize them.
• C) Once control and ownership are separated a conflict of interest arises between the owners and the people in control of a corporation.
• D) The separation of ownership and control is perhaps the most important reason for the success of the corporate organizational form. Because any investor can hold an ownership stake in a corporation, investors are able to diversify and thus, with no costs, reduce their risk exposures.

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Definitions:

Moderate Amount

A moderate amount indicates a quantity that is not too large nor too small but within a reasonable or acceptable range.

Seery et al., 2013

A reference to a specific study or publication by researchers Seery and colleagues in the year 2013, possibly pertaining to psychology or another scientific field.

Delinquent Behavior

Actions that violate societal norms or laws, often committed by juveniles or young adults.

Socioeconomic Status

An individual's or family's economic and social position in relation to others, based on income, education, and occupation.