Which of the Following Correctly Describes Moral Hazard-Type Behaviour by Managers

question 38

Multiple Choice

Which of the following correctly describes moral hazard-type behaviour by managers?

• A) Managers disclose complete information about their behaviour to the shareholders.
• B) Managers offer to increase sales and profits but, once hired, act in their own interests.
• C) Managers reduce the monitoring costs through good performance.
• D) Managers help in the expansion of the business and increase profits.

---

Definitions:

Melanocyte-Stimulating Hormone

A hormone produced by the pituitary gland that regulates skin pigmentation by promoting the production of melanin in melanocytes.

Skin Pigmentation

The coloring of a person's skin which is determined by the amount and type of melanin produced by the skin.

Hormone

A chemical substance produced in the body that serves as a messenger, regulating various physiological processes.

Growth Hormone

A hormone produced by the pituitary gland that stimulates growth, cell reproduction, and cell regeneration in humans and other animals.