Which one of the following is NOT true of risk?
A) It includes the length of time the asset will be unavailable for other uses.
B) It includes the probability that the strategy will be effective.
C) Managers who own a significant amount of stock in their firms are less likely to engage in risk-taking actions.
D) It includes the amount of assets the corporation must allocate to that strategy.
E) The greater the assets involved, the more likely top management is to demand a high probability of success.

Question

Quizplus · Accepted Answer

The statement that managers who own a significant amount of stock in their firms are less likely to engage in risk-taking actions is not true. In fact, managers who own a significant amount of stock in their firms may be more likely to engage in risk-taking actions in order to increase the value of their own holdings.

Which One of the Following Is NOT True of Risk