In a Situation in Which There Is a Conflict of Interest

question 73

Multiple Choice

In a situation in which there is a conflict of interest between an agent who is authorized to make a certain transaction for a principal and the principal,the agent is allowed to:

• A)engage in self-dealing transactions if the principal and the third party are unaware of the transactions.
• B)compete with the principal regarding the agency business.
• C)act as agent for both parties to a transaction without disclosing the double role to both principals.
• D)act as a middleman and serve both parties to a transaction without notifying either principal.

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Definitions:

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, but can lead to biases or errors in judgment.

Functional Fixedness

The failure to use familiar objects in novel ways to solve problems because of a tendency to view objects only in terms of their customary functions.

Problem-Solving Difficulty

Challenges or hindrances faced while attempting to find solutions or overcome obstacles.

Relative Comparison

The evaluation of something in relation or in contrast to something else, typically for assessment or decision-making purposes.