1. The best definition of a “white knight” is:

a. A corporate raider with a golden parachute.

b. A corporate raider who is paid greenmail.

c. A corporate raider with a golden parachute who is paid greenmail.

d. A new owner or owners that managers prefer to the corporate raider.

e. A manager who avoids a hostile takeover.

2. A firm is more likely to be a takeover target:

a. When the reason for its bad performance is overvalued assets rather than poor management.

b. When the reason for its bad performance is poor management rather than overvalued assets.

c. When it has never had any bad performance.

d. When its market value rises far above the underlying value of its assets.

e. When it market value and the underlying value of its assets are equal.

3. In the U.S., government programs frequently do all of the following except:

a. Promote negative externalities.

b. Regulate potential monopolies.

c. Redistribute income.

d. Provide goods and services.

e. Promote competition.