Question 3 (2 points)

Which of the following statements would you NOT agree with?

Question 3 options:

Well-designed compensation packages can be used to reduce agency problems between managers and shareholders

Managers with high firm ownership would usually exert more effort, in managing the firm, than managers with low firm ownership

Managers approaching retirement would usually favor R&D investments over short-term projects

Managers are usually more risk-averse than shareholders because they are less diversified