Agency Theory Assumes That Managers

question 70

Multiple Choice

Agency theory assumes that managers:

• A)Have a responsibility to the owners.
• B)Avoid opportunistic and self-serving activities.
• C) Eliminate agency costs.
• D) Can be left to their own devices.

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Definitions:

Attribution/covariation Model

A psychological theory that explains how individuals infer the causes of their own and others' behavior by observing patterns of covariation.

Kelley's (1973)

Pertains to Harold Kelley's 1973 attribution theory in social psychology, which seeks to explain how individuals infer causes of behavior based on observed evidence.

People's Behavior

The actions or reactions of individuals or groups in a particular situation or context.

Voidable Preferences

Transactions that can be invalidated by a bankruptcy trustee, often because they unfairly favor one creditor over others.