Which of the Following Possible Conflicts of Interest Is Usually

question 80

Multiple Choice

Which of the following possible conflicts of interest is usually minimized through the use of equity incentives?

• A)owner-manager conflict
• B)owner-employee conflict
• C)manager-employee conflict
• D)owner-debtholder conflict

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Definitions:

Arbitrage

The simultaneous purchase and sale of an asset in different markets to profit from price differences.

Direct Price Discrimination

The practice of charging different prices to different consumers for the same product or service, based on their willingness to pay.

Arbitrage

The simultaneous buying and selling of assets in different markets to exploit price differences for profit.

Elasticity of Demand

A gauge for the responsiveness of how much a product is wanted relative to fluctuations in its price.