Analysis Intermediate: Weighing Management Quality

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
A companys board of directors represents its management.
Choose wisely. There is only one correct answer.
False. The board represents the shareholders and their interests.
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.
Choose wisely. There is only one correct answer.
True. Companies include information on their managers in their shareholder statements, which are filed with the SEC.
3.
Investors should look for companies that _______.
Choose wisely. There is only one correct answer.
Have set clear goals for measuring progress. Good measurement is good management.
4.
Should an investor look with suspicion on companies whose employees do not have a clear separation between business and personal relationships?
Choose wisely. There is only one correct answer.
Yes. Lack of a boundary can be very bad for business.
5.
In terms of financial transparency, investors should prefer companies that _______.
Choose wisely. There is only one correct answer.
Disclose the minimum information, plus useful information that helps investors understand the business. Certainly every company should disclose all the information required by the SEC and other regulators. Above and beyond that, we think investors should favor companies that are forthright about their businesses, in good times and bad, and provide information that helps investors understand operations.