Which of the Following Is True of the Trade-Off Between

question 3

Multiple Choice

Which of the following is true of the trade-off between diversification and management control?

• A)Firms with concentrated ownership are likely to be poorly monitored and thus poorly managed.
• B)An undiversified investor does not share the benefits of control with other shareholders,but must bear alone the cost of having an undiversified portfolio.
• C)An individual investor who wishes to obtain enough shares to control management would generally have to hold an undiversified portfolio.
• D)The concentration of ownership is solely based on the costs of bearing firm-specific risk and not on management efficiency.

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Definitions:

Mutualisms Stability

Refers to the persistence and resilience of symbiotic interactions where both species benefit, despite environmental or evolutionary changes.

Yucca Moths

Specialized moths that have a mutualistic relationship with yucca plants, wherein the moth pollinates the plant while laying eggs in the flower, and the emerging larvae feed on some of the developing seeds.

Antagonistic

A relationship or interaction between two entities in which one opposes or competes with the other, leading to adaptation or evolution.

TTX

Tetrodotoxin, a potent neurotoxin found in species such as pufferfish, known for its ability to block nerve signals.