BGSO Module 2.3 - Quiz 6

In 2008 and early 2009, share values declined sharply as the global economy fell into a severe recession. This type of stock market is referred to as a:

Bear market.

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

Compensation committee.

Corporate governance involves the exercise of control over a company's:

Entire corporate direction.

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.

Reports filed with the SEC provide information on a company's:

Sales and earnings. Depreciation by line of business. Details of foreign operations. ALL OF THE ABOVE

Which of the following is not a function of board committees?

The finance committee works closely with the human resources department to fund employee salaries.

Which of the following is not a legal right of shareholders?

To vote on who will become chief executive officer (CEO).

Which of the following statements is not true about shareholders?

They own equal shares of company assets.