Moral Hazard in Equity Contracts Is Known as the ________

question 95

Multiple Choice

Moral hazard in equity contracts is known as the ________ problem because the manager of the firm has fewer incentives to maximize profits than the stockholders might ideally prefer.

• A)principal-agent
• B)adverse selection
• C)free-rider
• D)debt deflation

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Definitions:

Reflexive

Automatic response to a stimulus without conscious thought, often protecting the body from harm or facilitating basic functions.

Babbling

Babbling is a stage in child language acquisition during which an infant experiments with producing sounds of language, often comprising repeated syllables like "ba-ba" or "da-da," which precedes the development of recognizable words.

Babbling

An early stage of language development in infants, characterized by repetitive sounds and syllables without specific meaning, as a precursor to speech.

Syllables

Units of pronunciation having one vowel sound, with or without surrounding consonants, forming the whole or a part of a word.