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1.
Another term for fiduciary responsibility, according to Philip Fisher, is trusteeship.
True. Fisher described the qualities he looks for in managers as trusteeship.
2.
You can get information on the backgrounds and qualifications of the managers of companies you are interested in from the Securities and Exchange Commission.
True. Companies include information on their managers in their shareholder statements, which are filed with the SEC.
3.
A great way to reward managers for building a successful business is to _______.
Pay them a reasonable salary and a bonus tied to company profits. We like to see executive pay, in any form, tied to the operating and financial performance of the company. The best way to motivate executives is to pay them a reasonable salary (maybe even a "low" salary) and give them the opportunity to earn a significantly higher amount in the form of a bonus. Tying executive compensation to the stock price creates a perverse, short-term incentive for managers to say good things in public about the company rather than focus on making the company run better.
4.
Whom does the board of directors of a company represent?
The shareholders. The board is elected by the shareholders and technically represents them.
5.
A stock analyst might interview a companys customers to get a sense of whether the company would be a good investment.
True. An analyst might interview customers, typically larger institutional ones.
