A Problem for Equity Contracts Is a Particular Type of ________

question 5

Multiple Choice

A problem for equity contracts is a particular type of ________ called the ________ problem.

• A)adverse selection;principal-agent
• B)moral hazard;principal-agent
• C)adverse selection;free-rider
• D)moral hazard;free-rider

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Definitions:

Buying Center

The group of people typically responsible for the buying decisions in large organizations.

New Buy

In a B2B setting, a purchase of a good or service for the first time; the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item.

Straight Rebuy

Refers to when the buyer or buying organization simply buys additional units of products that have previously been purchased.

Wholesaler

A business entity that purchases goods in large quantities from manufacturers or importers and sells them in smaller quantities to retailers or other businesses.