Which of the Following Is Not Viewed as a Cost

question 5

Multiple Choice

Which of the following is not viewed as a cost to the principal in an agency relationship?

• A) Monitoring expenditures by the principal
• B) Monitoring expenditures by the agent
• C) Bonding expenditures by the agent
• D) The residual loss

Distinguish between shipment and destination contracts.

Identify the implications of entrusting goods to a merchant.

Explain the UCC's treatment of good faith purchasers.

Understand the impact of breaches in sales contracts on risk of loss.

---

Definitions:

Budget Constraint

Represents the combinations of goods and services a consumer can purchase given their income and the prices of those goods and services.

Opportunity Set

The entire spectrum of investment opportunities available to an investor, from which they can choose according to their risk appetite and return expectations.

Income

The amount of money received over a period of time, usually from work or investments.

Slope

A measure of the steepness or incline of a line, typically expressed as a ratio of vertical change to horizontal change.