A _____ generally has less understanding of the firm than a manager and has little knowledge that is likely to improve the quality of the manager's choices.
A)specialized residual claimant
B)diversified residual claimant
C)diversified hierarchy
D)specialized hierarchy

Question

Quizplus · Accepted Answer

A diversified residual claimant, typically an investor holding a diversified portfolio, has less specific knowledge about any single firm's operations compared to a manager who is directly involved in the day-to-day operations and decision-making processes of the company.

A _____ Generally Has Less Understanding of the Firm Than