The free-rider problem,when referring to monitoring of the firms' performance,often results in:
I.ineffective monitoring by the shareholders;
II.monitoring being delegated by shareholders to boards of directors;
III.no monitoring by a large number of small individual investors
A)I only
B)II only
C)III only
D)I,II,and III

Question

Quizplus · Accepted Answer

The free-rider problem affects all types of shareholders, resulting in ineffective monitoring by all shareholders, including small individual investors, who may not see the benefit of monitoring due to their small shareholding. As a result, monitoring is often delegated to boards of directors, who may not always act in the best interest of shareholders. Therefore, all options I, II, and III are correct.

The Free-Rider Problem,when Referring to Monitoring of the Firms' Performance,often