Most Financial Intermediaries

question 14

Multiple Choice

Most financial intermediaries:

• A) issue direct claims and purchase direct financial assets.
• B) issue indirect claims and purchase indirect financial assets.
• C) purchase large amounts of real, tangible assets.
• D) purchase direct financial claims and issue indirect securities.

Identify the types of authority an agent can have and how it affects principal liability.

Comprehend the impact of actual and apparent authority in binding the principal.

Recognize the conditions under which a third party is bound by notifications given to an agent with apparent authority.

Distinguish between express and implied authority and their implications for principal-agent relationships.

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Self-Censorship

The act of censoring or classifying one's own discourse, often out of fear of social, economic, or legal repercussions.

Vulnerability

The quality or state of being exposed to the possibility of being attacked or harmed, either physically or emotionally.

Self-Serving Bias

The common tendency to attribute our successes to personal characteristics and our failures to factors beyond our control.