There Are Obvious Incentives to Overcome Adverse Selection and Moral

question 159

Multiple Choice

There are obvious incentives to overcome adverse selection and moral hazard problems in the world of corporate finance. One way in which problems of moral hazard and adverse selection can be limited is through the use of programs in which managers and employees receive a share of profits earned by the firm. These programs are commonly known as

• A)fair profit exchange agreements.
• B)profit sharing agreements.
• C)earnings compatibility constraints.
• D)corporate earnings fairness.
• E)the economy of communion.

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Definitions:

Cardiac Diseases

A group of disorders that affect the heart and blood vessels, including conditions like coronary artery disease, heart failure, and arrhythmias.

Milton Hershey

An American businessman and philanthropist, founder of the Hershey Chocolate Company, and the town of Hershey, Pennsylvania.

Nickel

A silvery-white metal with a slight golden tinge that is used in alloys and to coat other metals to protect them from corrosion.

Milk Chocolate

A sweet chocolate confectionery made with milk powder, sugar, chocolate liquor, and sometimes vanilla and lecithin.