Question

Bernard is a board member at Lopez Electronics Inc. He is also a senior executive of the firm. The board is chaired by Ernest Jones, the CEO of Stanley Motors. According to this scenario, Bernard:_______.

a. is more likely than Ernest to take care of stockholder interests.
b. can use information from board meetings to trade stocks of Lopez Electronics.
c. is an inside director of Lopez Electronics.
d. cannot serve on the board of any other organization.

Answer 1

Answer: C. is an inside director of Lopez Electronics.

Explanation: It was stated that Bernard is a board member at Lopez Electronics and most board members of a company are either executive directors or non executive directors. Based on that fact Bernard should be an inside director at Lopez Electronics.

It was also stated that Bernard is a senior executive in the company, this also point to the fact that he is an inside director.