Which of the Following Is Not Used to Overcome the Agency

question 45

Multiple Choice

Which of the following is not used to overcome the agency problem?

• A) Executive compensation
• B) Audited financial statements
• C) Related party transactions
• D) Internal controls

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Definitions:

Junk Bond

A high-yield bond with a lower credit rating, reflecting a higher risk of default but offering potentially greater returns.

High-Risk Bond

A bond with a lower credit rating, indicating a higher risk of default, but offering higher potential returns to compensate for this risk.

High Yields

Bonds that offer higher interest rates because they have lower credit ratings, implying greater risk of default.

Oligopolies

Markets dominated by a small number of large firms, leading to limited competition.