Compression Testing Is Being Discussed

question 47

Multiple Choice

Compression testing is being discussed. Technician A says that the ignition should be disabled. Technician B says that the fuel system should be disabled. Who is correct?

• A) A only
• B) B only
• C) Both A and B
• D) Neither A nor B

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Definitions:

Agency Problem

A conflict of interest inherent in any relationship where one party is expected to act in the best interest of another.

Moral Hazard

A condition in which a person can benefit, usually financially, by acting unethically or immorally, i.e., the person is tempted to be less than honest and ethical. An insurance term. A moral hazard exists when executive compensation is heavily based on the market price of the company’s stock.

Arbitrage

The practice of taking advantage of price differences in different markets to make a profit.

Money Markets

Financial markets focused on short-term borrowing and lending with maturities of less than one year, dealing in instruments like Treasury bills and commercial paper.