When an Agent Is Interacting with a Third Party on Behalf

question 5

Multiple Choice

When an agent is interacting with a third party on behalf of a principal, the principal is said to be undisclosed if:

• A) the agent is a general agent who has authority to transact all of the business of the principal.
• B) an agent and a third party interacts and the third party has no notice that the agent is acting for a principal.
• C) the third party with whom the agent interacts knows the agent is acting on behalf of a principal, and he or she knows who the principal is.
• D) an agent and a third party interact and the third party has notice that the agent is acting for a principal but it does not know the principal's identity.

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Definitions:

Structural Risks

Associated with the possibility of loss due to the physical structure or fundamental nature of a business or industry, affecting its stability and profitability.

Skill Set

The range of skills or competencies that an individual possesses, which are relevant to, or necessary for, a particular role or profession.

Operational Risks

The risks of loss resulting from inadequate or failed internal processes, people and systems, or from external events impacting the operation of a business.

Structural Risks

Refers to the potential for failure or significant damage to a system, organization, or structure due to inherent weaknesses or flaws.