Why Is the Stock Price of a Company an Indication

question 57

Multiple Choice

Why is the stock price of a company an indication of the performance of the company's senior managers?

• A) Well-run companies are invariably highly profitable, which leads to a higher share price.
• B) In general, people want to invest in a well-managed corporation, which will drive up the price of shares.
• C) Investors who can see that a company is well-run will hold on to their shares, even if the company faces setbacks, since they know that the stock price will likely rise again.
• D) Larger companies tend to be better run and so have higher stock prices.

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Definitions:

Genital Herpes

A sexually transmitted infection caused by the herpes simplex virus, leading to blisters and sores on the genital area.

Human Papillomavirus

See also genital human papillomavirus infection or genital HPV.

Unsafe Sex

Sexual activities that increase the risk of catching or spreading sexually transmitted infections (STIs), including HIV, due to the lack of protective barriers such as condoms.

Masturbates

The act of self-stimulation of one’s own genitals, often to the point of orgasm, as a form of sexual pleasure.