The daily percentage change in an exchange rate is compared to a normal distribution with the same mean and standard deviation. Which of the following is true
A. Both small and large exchange rate moves are more likely than with the normal distribution
B. Small exchange rate moves are less likely and large exchange rate moves are more likely than with the normal distribution
C. Large exchange rate moves are less likely and small exchange rate moves are more likely than with the normal distribution
D. Both small and large exchange rate moves are less likely than with the normal distribution
A
Both large and small movements in the exchange rate happen more often than the normal distribution would predict.
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Which of the following statements regarding the distinctions between internal and external audit is true?
a) The internal auditing profession was created primarily in response to the 1933 and 1934 Securities Exchange Act, external auditing was a concept that came from the stock exchange rules. b) The external auditor reports directly to the audit committee, internal audit reports to the CFO. c) Internal auditors hold fiduciary responsibility to shareholders; external auditors hold only a contractual obligation to the corporation retaining the audit service . d) Internal auditors concentrate on the reliability of the accounting data input and subsequent systems processing; external auditors concentrate on the validity of the accounting data output and the underlying supporting evidence.
In which of the following cases will the agency problem between shareholders and managers be the
greatest? A) The Johnson family owns 50% of the common stock of the company. The other 50% is owned by 5 mutual funds. B) 100% of the common stock is owned by the founder of the company who decided to retire and hired a manager to run his business for him. C) The common stock of the company is owned by many diverse shareholders, with no shareholder owning more than 1% of the outstanding stock. D) All top managers in the company own significant amounts of stock and stock options.