Which of the Following Describes an Agency Bias

question 27

Multiple Choice

Which of the following describes an agency bias?

• A)John has been studying the telecommunications industry and a certain stock in particular. He sees no way that the stock price will not increase by 50% by the end of the year, and he
• Invests his entire investment funds in it.
• B)The CEO of a corporation requests her own private jet, separate from the private jet that flies other members of the executive team, arguing that it allows her to focus better when
• Flying to a meeting.
• C)A certain project will cost $500 and is expected to return $1,000 at the end of one year--a 100% return on the investment. A second project will cost $1,500 and is expected to return
• $2,700 next year. Noting that the second project returns only 80%, a manager decides to
• Undertake the first project since the projects are mutually exclusive.
• D)Both B and C describe agency biases.

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Definitions:

Early Adopters

Consumers who are among the first to purchase and use new products or technologies, often helping to spread word-of-mouth information.

Late Majority

A segment of consumers in the technology adoption lifecycle that is skeptical of change and adopts new products or technologies after the majority of the market has accepted them.

Early Majority

A segment of consumers who adopt new products or innovations shortly after the early adopters, contributing significantly to market penetration and success.