Which of the Following Statements Is FALSE

question 1

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:

Past Reinforcement

Previous experiences of being rewarded or punished, which influence future behaviors and decision-making processes.

Actualize

The process of realizing or achieving one's potential or abilities, often associated with the fulfillment of personal goals or self-improvement.

Interpretation

The process of explaining the meaning of something, especially in the context of data, texts, dreams, or behaviors.

Psychoanalysis

A set of psychological theories and therapeutic methods which aim to treat mental disorders by investigating the interaction of conscious and unconscious elements in the mind and bringing repressed fears and conflicts into the conscious mind by techniques such as dream interpretation and free association.