An oil company has entered into a joint venture with a competing oil company to develop a new oil field. The joint venture arrangement is intended to mitigate the risks associated with developing the oil field.
The following disclosure appears in the oil company’s risk report:
"Many of our large projects and operations are conducted through joint ventures. These arrangements involve complex risk allocation and indemnification arrangements and we have less control over these activities than we would have if we had full ownership and control. Our partners may have economic or business interests that are opposed to ours, and may exercise the right to block key decisions or actions. We believe the joint arrangement is in our best interest."
Which of the following statements are correct?
A . The risk report means that the shareholders know exactly how bad the risk is.
B . The risk report says nothing useful about the risk.
C . Now the shareholders know the directors are aware of the risk.
D . If the risk report had not reported the risk the shareholders might not have been aware of the risk.
E . The shareholders now have more useful information.
Answer: C,D,E