Which of the Following Would Be Best Considered to Be

question 33

Multiple Choice

Which of the following would be best considered to be a principal-agent problem in the behaviour of the following financial managers?

• A)Bill chooses to pursue a risky investment for the company's funds,because his compensation will substantially rise if it succeeds.
• B)Sue instructs her staff to skip safety inspections in one of the company's factories,knowing that it will likely fail the inspection and incur significant costs to fix.
• C)James ignores an opportunity for his company to invest in a new drug to fight Alzheimer's disease,judging the drug's chances of succeeding as low.
• D)Michael chooses to enhance his firm's reputation at some cost to its shareholders by sponsoring a team of athletes for the Special Olympics.
• E)Tara treats her staff to a free lunch at the company's expense to increase morale.

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Definitions:

IPv6

Internet Protocol version 6, the most recent version of the Internet Protocol (IP), designed to address the limitations of IPv4, including a much larger pool of IP addresses.

Multipurpose Internet Mail Extensions

A standard that extends the format of email messages to support text in various character sets, and attachments of audio, video, images, and application programs.

Packet Switching

A communications methodology that makes computer communication efficient by breaking up data into smaller chunks called packets.

Encryption

The process of coding e-mail so that only the person with the key to the code (the intended recipient) can decode the message.