Which of the Following Statements Is NOT a Reason for Companies

question 8

Multiple Choice

Which of the following statements is NOT a reason for companies to actively manage risks?

• A)Firms generally have lower transactions costs due to a larger volume of hedging activities.
• B)Nowadays most investors hold well-diversified portfolios.
• C)Managers know more about the firm's risk exposure than outside investors due to asymmetric information.
• D)Firms are more likely to have specialized skills and knowledge required for effective risk management.

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Definitions:

Coefficient Of Relatedness

A measure of how closely individuals are genetically related, used in studies of altruism and social behavior in animals.

Group Living

The lifestyle in which individuals of a species live closely together in communities or social units for mutual benefit.

Social Cognition

The study of how people process, store, and apply information about others and social situations, influencing their behavior and interactions.

Vervet Monkey

A medium-sized primate species known for its black face and grey body fur, native to Africa.