A bond is a(n):
A. claim to partial ownership of a firm.
B. agreement issued by a financial intermediary linking savers and investors.
C. regular payment made to owners of a firm.
D. legal promise to repay a debt.
Answer: D
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a. Managers are difficult to evaluate because there is no simple metric of how well they performed b. Managers typically have the necessary information to run their division efficiently c. Managers' decisions rarely affect other divisions d. Managers typically do not have the incentives to run their division efficiently
If two steel firms merge, the merger is described as
a. a horizontal merger b. a vertical merger c. a conglomerate merger d. either a vertical or conglomerate merger depending on whether the oligopoly is balanced or unbalanced e. either a vertical or conglomerate merger depending on the number of steel firms in the steel industry