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Free Questions › CFA › Corporate Issuers
Free CFA Corporate Issuers Practice Questions & Answers
900 exam-style Corporate Issuers questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 751
Which stakeholder group hires and oversees management?
Select an option first.
Correct answer: C — Board of directors
Explanation: C is correct because the board hires and monitors management. A is wrong because employees do not appoint management. B is wrong because shareholders elect the board, not managers. D is wrong because governments regulate but do not hire managers.
Question 752
Which statement best describes stakeholder theory?
Select an option first.
Correct answer: B — All stakeholders’ interests should be considered
Explanation: B is correct because stakeholder theory includes all affected parties. A is wrong because that is shareholder theory. C and D are wrong because they exclude other stakeholders.
Question 753
Which is a challenge of stakeholder theory?
Select an option first.
Correct answer: B — Difficulty balancing multiple objectives
Explanation: B is correct because stakeholder theory requires balancing competing interests. A is wrong because there are many objectives. C is wrong because ESG is part of stakeholder theory. D is wrong because boards remain essential.
Question 754
Which investor type typically has direct access to management?
Select an option first.
Correct answer: B — Private lenders
Explanation: B is correct because private lenders often negotiate directly with management. A is wrong because bondholders rely on public information. C is wrong because retail shareholders have no direct access. D is wrong because regulators oversee compliance, not financing.
Question 755
Why do private lenders have more influence than bondholders?
Select an option first.
Correct answer: B — They often provide critical financing
Explanation: B is correct because private lenders may be the primary financing source. A is wrong because lenders do not vote. C is wrong because private lenders do not issue public debt. D is wrong because private lenders do access non-public information.
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Question 756
Which statement best describes bondholders?
Select an option first.
Correct answer: C — They rely on public disclosures
Explanation: C is correct because bondholders depend on public financial statements. A is wrong because private information is not available to them. B is wrong because bonds may be traded. D is wrong because renegotiation is difficult.
Question 757
Why are staggered boards used?
Select an option first.
Correct answer: B — To ensure continuity in oversight
Explanation: B is correct because staggered boards maintain continuity. A is wrong because staggered boards slow replacement. C is wrong because voting remains. D is wrong because independence is unrelated.
Question 758
Which board structure is common in Germany?
Select an option first.
Correct answer: B — Two-tier
Explanation: B is correct because Germany uses a two-tier system with a supervisory board. A is wrong because single-tier is common in the US/UK. C and D are wrong because they contradict governance norms.
Question 759
Which group provides human capital to the firm?
Select an option first.
Correct answer: B — Employees
Explanation: B is correct because employees supply labor and skills. A is wrong because customers provide demand. C is wrong because suppliers provide goods/services. D is wrong because governments regulate.
Question 760
Which of the following is a typical customer expectation?
Select an option first.
Correct answer: B — Product quality and safety
Explanation: B is correct because customers expect safe, high-quality products. A and C are wrong because customers do not govern the firm. D is wrong because customers do not access internal data.
Question 761
Which ESG factor includes climate change and pollution?
Select an option first.
Correct answer: C — Environmental
Explanation: C is correct because environmental factors include climate and pollution. A is wrong because social factors relate to people. B is wrong because governance relates to oversight. D is wrong because operations are not an ESG category.
Question 762
Which ESG factor includes board composition?
Select an option first.
Correct answer: C — Governance
Explanation: C is correct because governance includes board structure and oversight. A is wrong because environmental concerns nature. B is wrong because social concerns people. D is wrong because operations are not ESG.
Question 763
Which ESG factor includes employee engagement?
Select an option first.
Correct answer: B — Social
Explanation: B is correct because social factors include employee relations. A is wrong because environmental concerns nature. C is wrong because governance concerns oversight. D is wrong because financial is not an ESG category.
Question 764
What is a physical risk of climate change?
Select an option first.
Correct answer: B — Damage to assets from severe weather
Explanation: B is correct because physical risks involve direct damage from weather events. A and D are wrong because they are regulatory risks. C is wrong because it is a demand-side transition risk.
Question 765
What is a transition risk of climate change?
Select an option first.
Correct answer: C — Declining demand for high-emission products
Explanation: C is correct because transition risks involve shifts toward low-carbon alternatives. **A, B, and D are physical risks.
Question 766
What are stranded assets?
Select an option first.
Correct answer: B — Assets that become unusable due to regulation or economics
Explanation: B is correct because stranded assets lose viability due to climate policy or market shifts. **A, C, and D are incorrect because they contradict the definition.
Question 767
Why are ESG factors increasingly quantifiable?
Select an option first.
Correct answer: B — Improved disclosures and analysis
Explanation: B is correct because better reporting and frameworks make ESG measurable. A is wrong because financial reporting continues. C and D are wrong because ESG is increasingly important and quantifiable.
Question 768
Which ESG issue is most likely to affect long-term debt more than short-term debt?
Select an option first.
Correct answer: B — A 30-year climate transition risk
Explanation: B is correct because long-term risks affect long-maturity debt more. **A, C, and D are short-term issues.
Question 769
Which stakeholder group is most affected by layoffs?
Select an option first.
Correct answer: B — Employees
Explanation: B is correct because layoffs directly affect employees. **A, C, and D are indirectly affected at most.
Question 770
Which group relies on product safety and quality?
Select an option first.
Correct answer: B — Customers
Explanation: B is correct because customers expect safe, reliable products. **A, C, and D do not rely on product safety in the same way.
Question 771
Which stakeholder group provides raw materials?
Select an option first.
Correct answer: B — Suppliers
Explanation: B is correct because suppliers provide inputs. **A, C, and D do not supply materials.
Question 772
Which group collects taxes from corporations?
Select an option first.
Correct answer: B — Governments
Explanation: B is correct because governments collect taxes. **A, C, and D do
Question 773
Which stakeholder group is most directly affected when a company delays payments due to financial distress?
Select an option first.
Correct answer: B — Suppliers
Explanation: B is correct because suppliers often extend trade credit and are directly harmed by delayed payments. A is wrong because customers are not directly affected by payment delays. C is wrong because employees are paid through payroll, not supplier terms. D is wrong because shareholders are indirectly affected but not the primary group harmed.
Question 774
Which of the following best describes a stakeholder?
Select an option first.
Correct answer: B — Any party with a vested interest in the company
Explanation: B is correct because stakeholders include all parties affected by the company’s actions. A is wrong because shareholders are only one stakeholder group. C is wrong because stakeholders include more than employees and suppliers. D is wrong because regulators are only one category.
Question 775
Which of the following is a key difference between shareholder theory and stakeholder theory?
Select an option first.
Correct answer: B — Stakeholder theory considers all affected parties
Explanation: B is correct because stakeholder theory expands governance to include all stakeholder interests. A is wrong because shareholder theory focuses on shareholder value, not ESG. C is wrong because both theories require board oversight. D is wrong because stakeholder theory still considers shareholders.
Question 776
Which of the following is a challenge of stakeholder theory?
Select an option first.
Correct answer: B — Difficulty defining and measuring non-financial goals
Explanation: B is correct because stakeholder theory requires balancing multiple, often qualitative objectives. A is wrong because there are many objectives. C is wrong because boards remain central. D is wrong because ESG is part of stakeholder theory.
Question 777
Which investor type typically relies on public financial statements for decision-making?
Select an option first.
Correct answer: B — Bondholders
Explanation: B is correct because bondholders depend on public disclosures. A is wrong because private lenders access non-public information. C and D are wrong because they are not financial investors.
Question 778
Why do private lenders often have more influence over a company than bondholders?
Select an option first.
Correct answer: B — They negotiate terms directly with management
Explanation: B is correct because private lenders negotiate directly and can impose conditions. A is wrong because lenders do not vote. C is wrong because private lenders do not issue public debt. D is wrong because private lenders do access private information.
Question 779
Which of the following is a typical responsibility of a board of directors?
Select an option first.
Correct answer: B — Hiring and overseeing the CEO
Explanation: B is correct because boards hire and monitor the CEO. **A, C, and D are operational tasks handled by management, not the board.
Question 780
Why do stock exchanges require a certain number of independent directors?
Select an option first.
Correct answer: B — To protect minority shareholders
Explanation: B is correct because independent directors help ensure fair oversight. A is wrong because independence does not reduce profits. C is wrong because management still runs operations. D is wrong because exchanges, not governments, set these rules.
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