The increasing percentage ownership of public corporations by institutional investors has
A) had no effect on corporate management.
B) created higher returns for the stock market in general.
C) created more pressure on public companies to manage their firms more efficiently.
D) taken away the voice of the individual investor.

Question

Quizplus · Accepted Answer

Institutional investors, such as mutual funds and pension funds, have significant ownership stakes in public corporations. As a result, they have increased their scrutiny of corporate management and put more pressure on companies to manage their firms more efficiently. This has led to better corporate governance, increased focus on shareholder value, and improved overall performance. However, it has also reduced the influence of individual investors on corporate decision-making. Therefore, choice C is the correct answer.

The Increasing Percentage Ownership of Public Corporations by Institutional Investors