Most Institutional Investors and Watchdog Groups Prefer a Large Majority

question 84

Multiple Choice

Most institutional investors and watchdog groups prefer a large majority of independent directors on a board to avoid ________ while carrying out fundamental responsibilities.

• A) information leaks
• B) conflicts of interest
• C) personality conflicts
• D) unnecessary expenses

---

Definitions:

Marginal Cost

The expenditure involved in producing a further unit of a good or service.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use doesn't diminish another's.

Optimal Quantity

The amount of a good or service that yields the maximum economic benefit or utility.

Cost-Benefit Analysis

A comparison of the marginal costs of a project or program with the marginal benefits to decide whether or not to employ resources in that project or program and to what extent.