Which of the Following Statements Is FALSE

question 26

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 structure-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:

Self-Control

The capacity of a person to control their feelings, ideas, and actions when confronted with desires and sudden urges.

Self-Compassion

The practice of being kind and understanding toward oneself in instances of pain or failure, rather than being harshly self-critical.

Mindfulness

A mental state achieved by focusing one's awareness on the present moment, while calmly acknowledging and accepting one's feelings, thoughts, and bodily sensations.

Common Humanity

The understanding that all human beings share similar experiences, challenges, and feelings, fostering a sense of solidarity and empathy.