Question

Evidence exists that directors

a. aggressively represent the interests of shareholders.

b. are quick to replace or reduce the compensation of underperforming CEOs.

c. often represent the interests of the managers who nominated them for directorships.

d. are vigilant in requiring that the​ firm's assets be used efficiently.

2.

You are considering a portfolio of three stocks with​ 30% of your money invested in company​ X, 45% of your money invested in company​ Y, and​ 25% of your money invested in company Z. If the betas for each stock are 1.22 for company​ X, 1.46 for company​ Y, and 1.03 for company​ Z, what is the portfolio​ beta?

1.33

1.28

1.24

1.00

Answer 1

1. Evidence suggest that directors always work for the interest of those managers who have nominated them for directorships because they always look for enhancement of compensation for those managers as well as other managerial perks. Directors should always be looking for working in the betterment of shareholders interest but evidences suggest that directors works for the manager's interest rather than shareholders interest.

Rest of the options like directors work vigilantly for efficient use of assets or cuts the compensation of CEO who are non performing are not evidenced.

Show the correct answer would be option( C)