Ethics CH13

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The board committee that administers and approves salaries and benefits of high-level managers in a company is called:

Compensation

Trading stocks in advance of large institutional investment moves is called:

Front-running.

An argument that opposes the idea of high executive pay is:

High salaries divert resources that could be used to invest in the business.

The "agency problem" arises when:

Managers act in their own interest, rather than in the interest of shareholders.

The mission of the Securities and Exchange Commission (SEC) is to:

Protect shareholders' rights by making sure that stock markets are run fairly.


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