Analysis Intermediate: Weighing Management Quality

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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?
Choose wisely. There is only one correct answer.
Yes. Lack of a boundary can be very bad for business.
2.
To learn about a prospective company, stock analysts might interview _______.
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All of the above. An analyst might interview all of them, and others as well, such as suppliers.
3.
Whom does the board of directors of a company represent?
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The shareholders. The board is elected by the shareholders and technically represents them.
4.
In terms of financial transparency, investors should prefer companies that _______.
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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.
5.
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.