Which of the Following Arguments Provided by Milton Friedman Suggests

question 90

Multiple Choice

Which of the following arguments provided by Milton Friedman suggests that corporate social responsibility may be unethical?

• A)Social responsibility compels managers to spend money on some individuals that rightfully belongs to other individuals.
• B)Social responsibility is not mandated by law,which means that it has to be done by will,not by compulsion.
• C)Empirical studies have not yet demonstrated a definitive relationship between corporate social responsibility and profitability.
• D)Profitability and growth go hand-in-hand with responsible treatment of employees,customers,and the community.
• E)Firms use social responsibility to increase their brand awareness.

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Definitions:

Single Factor Model

A financial model that describes an asset's returns as dependent on a single market index or factor.

Fama-French Three Factor Model

The Fama-French Three Factor Model expands on the Capital Asset Pricing Model by incorporating three factors: market risk, size risk, and value risk, to explain stock returns.

Risk Premiums

The extra return expected by investors for holding a risky asset compared to a risk-free asset, as compensation for the additional risk.

Expected Return

The anticipated profit or loss from an investment, taking into account the potential outcomes and their probabilities.