Mark Works as a Business Development Officer for a Leading

question 81

Multiple Choice

Mark works as a business development officer for a leading electronics company.His main task is to meet potential clients at their offices and set up business deals with them.Mark earns a fixed salary every month irrespective of the number of clients approached and deals made.As his boss does not cross-check the number of clients he meets in a day,Mark often does not meet all the clients that he is supposed to.His behavior is an example of ________.

• A) adverse selection
• B) moral hazard
• C) a positive externality
• D) a pecuniary externality

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets compared to its current liabilities.

Financial Statements

Authorized documents reflecting the economic actions and condition of an organization, individual, or different party, often encompassing the balance sheet, income statement, and cash flow statement.

Common Shares

Equity securities that represent ownership in a corporation, giving shareholders voting rights and a residual claim on corporate earnings in the form of dividends.

Total Equity

Represents the value left in a company after all liabilities have been subtracted from assets, essentially the net assets owned by shareholders.