Using an Agent Provides Benefits to a Principal, Without Potential

question 115

True/False

Using an agent provides benefits to a principal, without potential liability.

---

Definitions:

Financial Benefit

An economic advantage or gain received, such as income, dividends, or appreciation in asset value.

Fair Market Value

Fair market value is the price at which a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts, would engage in a transaction.

Moral Hazard

The possibility that individuals who are insulated from risk sometimes behave differently than they would if not insulated.

Risk Insulation

Strategies or practices employed to protect an entity from potential financial losses or liabilities.