A situation in which executives may diversify a firm to the point that it fails to earn even average returns results from:
A)the firm's poor performance
B)the implementation of only related diversification
C)the firm's weak governance mechanisms
D)market uncertainty

Question

Quizplus · Accepted Answer

Weak governance mechanisms can lead to executives making poor decisions regarding diversification, including over-diversification which can lead to the firm's failure to earn even average returns.

A Situation in Which Executives May Diversify a Firm to the Point