Purchase of insurance, main reason that diversified

Purchase of insurance

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Reference no: EM1373035

Purchase of insurance

The main reason that diversified shareholders might NOT want their corporate managers to purchase insurance against firm specific losses is that:

a. they like risk

b. they have already diversified away the risk that is being insured

c. they are risk averse

d. cash flow variability increases their return on investment

Reference no: EM1373035

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