Choose wisely. There is only one correct answer to each question.
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1.
Should an investor look with suspicion on companies whose employees do not have a clear separation between business and personal relationships?
Yes. Lack of a boundary can be very bad for business.
2.
A companys board of directors represents its management.
False. The board represents the shareholders and their interests.
3.
How much money the company pays its CEO and top management is _______.
An important sign of how the company has set up its incentive system. The compensation of top corporate officers is a touchy subject, mostly because a lot of corporate officers are paid a great deal of money. We dont have any hard and fast rules for determining how much is "too much," but at the extremes, executive pay can eat up a significant chunk of corporate profits, which eats directly into shareholder returns.
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.
To learn about a prospective company, stock analysts might interview _______.
All of the above. An analyst might interview all of them, and others as well, such as suppliers.
