Identify an Accurate Statement About Agency Problems

question 3

Multiple Choice

Identify an accurate statement about agency problems.

• A)They are mostly faced by sole proprietorships.
• B)The managers of a corporation are also called the principals.
• C)They occur when the goals of principals differ from those of agents.
• D)The shareholders of a corporation act as the agents of the principals.

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Definitions:

Rank Order

A method of arranging data points based on their value, from highest to lowest or vice versa.

Measurement

The process or the result of determining the size, length, or amount of something, usually according to a set of standard units.

Nominal Scale

A classification system where numerical or non-numerical data are categorized without a natural order or ranking.

Measurement

The process of quantifying the characteristics of phenomena observed, usually by assigning numbers in a valid and reliable way.