Which of the following is an accurate statement regarding the misappropriation of assets?
A) In most cases, the amounts involved are material to the financial statements.
B) Misappropriation of assets can easily increase in size over time and can lead to significant reputational harm.
C) Management should not be concerned about minor misappropriations.
D) Asset misappropriation schemes are less common than fraudulent financial statement schemes.
B
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Which of the following is true of risk aversion?
A) Greater risk aversion results in lower required returns for each level of risk. B) A reduction in risk aversion causes the required return for each level of risk to increase. C) In general, widely shared expectations of hard times ahead tend to cause investors to become less risk averse. D) Changes in risk aversion, and therefore shifts in the SML, result from changing preferences of investors.
You are talking with a manager about one of his employees, Tom. The manager describes Tom as a person who has a strong desire to do the best possible job and put in the maximum effort to perform his assigned tasks. The manager is describing Tom's:
A) abilities. B) capabilities. C) motivation. D) productivity level.