In the Principal-Agent Relationship Between a Bank Manager and a Bank

question 27

Multiple Choice

In the principal-agent relationship between a bank manager and a bank teller, the manager is

• A) an agent, as is the teller.
• B) an agent and the teller is a principal.
• C) a principal and the teller is an agent.
• D) a principal, as is the teller.

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Definitions:

Carrying Value

The recorded cost of an asset in a company's books, less any accumulated depreciation or amortization.

Face Value

The nominal value printed on a financial instrument, such as a bond or stock certificate, representing its worth as stated by the issuer.

Bond Interest Paid

The amount paid by the issuer of a bond as interest to the bondholders, usually expressed as a fixed percentage of the principal.

Discount

A reduction from the usual cost of something or the act of lowering the price.