1

What is the most common reason that firms will engage in diversification into another industry through mergers or acquisitions?

Create innovations.

None of these.

Grow the size of the firm.

Eliminate competition.

2

In the corporate governance of public U.S. firms, what is the main mechanism that is supposed to limit moral hazard and adverse selection by the CEO and other top managers of a public corporation?

Shareholders

Board of directors

News media

None of these

3

Which of the following is an important part of strategy for all firms?

Quick innovation.

Excellence in operations.

Defining a unique position in the industry.

Hiring a successful CEO.