Question 1

Which one of the following statements is correct?&#10;A)Surprisingly, control by banks is relatively low in continental Europe.&#10;B)Apart from the UK and the Netherlands, institutional investors are relatively unimportant.&#10;C)The most important type of large shareholder across continental Europe is holding companies and industrial companies.&#10;D)All of the above are correct.

Accepted Answer

All of the statements are correct.

Question 2

Internal capital markets, i.e. capital markets within so called business groups, tend to be efficient, if &#8230;&#10;A)The business groups are in the form of horizontal structures.&#10;B)The business groups are characterised by cross-shareholdings.&#10;C)The business groups are in the form of ownership pyramids.&#10;D)None of the above.

Accepted Answer

C

Question 3

Which one of the following statements is correct?&#10;A)Institutional investors, followed by managers, are the most important types of shareholders in the UK.&#10;B)Managers are the most important type of shareholder in the UK.&#10;C)Institutional investors are the second most important type of shareholder in the UK.&#10;D)None of the above are correct.

Accepted Answer

Institutional investors are indeed the most significant type of shareholders in the UK, with managers often holding significant stakes as well. This reflects the structure of ownership in many UK companies, where institutions like pension funds, insurance companies, and investment trusts hold large portions of equity.

Question 4

Which one of the following statements is correct?&#10;A)Corporate control in Eastern Europe is slightly lower than in Western Europe.&#10;B)Corporate control in Eastern Europe is slightly lower than in Western Europe and the second largest shareholder is much more important.&#10;C)Corporate control in the transitional economies of Eastern Europe is as concentrated as in Western Europe.&#10;D)None of the above.

Accepted Answer

According to the article, "Corporate control in Eastern Europe generally is lower than in Western Europe, but the second-largest shareholder often has much more power." Choice B is the only option that accurately reflects this statement. Choices A and C are either completely incorrect or exaggerate the level of corporate control in Eastern Europe. Choice D is not an option as Choice B is correct.

Question 5

Which one of the following statements is correct?&#10;A)The concentration of control in UK firms is low, but still higher than in US firms.&#10;B)Most of stock-market listed firms in the USA have a shareholder with a blocking minority, but no shareholder with a majority of the votes.&#10;C)The concentration of control in the Netherlands is comparable to that in UK and US firms.&#10;D)None of the above.

Accepted Answer

The concentration of control in UK firms is higher than in US firms, but lower than in Netherlands firms.

Question 6

Which one of the following statements is correct?&#10;A)Families are the most important type of large shareholder across all of Europe.&#10;B)Institutional shareholders are the main type of shareholder in the UK.&#10;C)Institutional shareholders are the main type of shareholder in the Netherlands.&#10;D)Both B and C are correct.

Accepted Answer

According to the article, institutional shareholders are the main type of shareholder in the UK and the Netherlands. Therefore, statement B and C are correct. Statement A is not mentioned in the article and cannot be confirmed. Therefore, the correct answer is D.

Question 7

Compared to UK firms, German firms ...&#10;A)experience a much more rapid separation between ownership and control after going public.&#10;B)experience no or at least a much less rapid separation between ownership and control after going public.&#10;C)are on average older when they go public.&#10;D)Both B and C are correct.

Accepted Answer

German firms tend to have a much closer connection between ownership and control than UK firms, meaning that there is less separation between them after going public. Additionally, German firms tend to be on average older when they go public, likely due to the emphasis on maintaining family or founder control within the business.

Question 8

Which one of the following statements is correct?&#10;A)The concentration of control in Japan is low compared to other Asian countries.&#10;B)Zaibatsus are typically the pre-WWII form of most keiretsus.&#10;C)A keiretsu is a group of industrial companies with ties to a single bank which acts as the principal lender to the group companies.&#10;D)All of the above.

Accepted Answer

All the statements provided are correct. A) Japan is known for its high concentration of control within its corporate sector, especially in comparison to other Asian countries. B) Zaibatsus were indeed the pre-WWII conglomerates in Japan, which were restructured into keiretsus post-WWII. C) A keiretsu is accurately described as a group of interlinked companies, often centered around a bank which provides financing to the group's companies.

Deck 2: Corporate Control Across the World