When an Employee's Interests Are Likely to Interfere with the Employee's

question 50

Multiple Choice

When an employee's interests are likely to interfere with the employee's ability to exercise proper judgment on behalf of the organization, what exists?

• A) a golden opportunity
• B) a conflict of interest
• C) a balance of power
• D) a disaster

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Definitions:

Capital at Risk

The amount of capital that could be lost in an investment due to risk factors.

Company's Liabilities

Financial obligations a company owes to outside parties, including debts, loans, and other forms of financial liabilities.

Efficient Market

A market in which prices fully reflect all available information and assets are priced accurately.

Moral Hazard

The situation where one party takes risks because they know they will not bear the full consequences of their actions, often due to asymmetric information or contracts.