Which of the Following Statements Is False

question 19

Multiple Choice

Which of the following statements is false?

• A) The United States is somewhat of an exception, in that it focuses solely on maximizing shareholder welfare.
• B) A controlling family has many opportunities to expropriate minority shareholders in a pyramid structure.
• C) One way for families to gain control over firms even when they do not own more than half the shares is to issue dual class shares-a scenario in which companies have more than one class of shares and one class has superior voting rights over the other class.
• D) Researchers have claimed that the degree of investor protection was largely determined by the legal origin of the country-specifically, whether its legal system was based on British common law (less protection) or French, German, and Scandinavian civil law (more protection).

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Definitions:

Average Stock

The average price of a company's stock over a specific period, which can indicate the stock's general trend.

Diversified Portfolio

An investment portfolio that contains a mix of assets (e.g., stocks, bonds, real estate) to reduce risk through diversification.

Market Portfolio

A portfolio consisting of all stocks.

Correlation

A statistical measure that describes the extent to which two variables change together, and thus how well one variable can predict the other.