As a rule, shareholders prefer more product diversification than do managers because shareholders wish to reduce risk and maximize wealth.

Name: As a rule, shareholders prefer more product diversification than do managers because shareholders wish to reduce risk and maximize wealth.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Shareholders can diversify their own portfolios to manage risk, while managers may pursue diversification to reduce firm-specific risk or for personal incentives.

As a Rule, Shareholders Prefer More Product Diversification Than Do