Which of the Following Would Be Best Considered to Be

question 36

Multiple Choice

Which of the following would be best considered to be an agency problem in the behaviour of the following financial managers?

• A)Michael chooses to enhance his firm's reputation at some cost to its shareholders by sponsoring a team of athletes for the Special Olympics.
• B)James ignores an opportunity for his company to invest in a new drug to fight Alzheimer's disease, judging the drug's chances of succeeding as low.
• C)Sue instructs her staff to skip safety inspections in one of the company's factories, knowing that it will likely fail the inspection and incur significant costs to fix.
• D)Bill chooses to pursue a risky investment for the company's funds, because his compensation will substantially rise if it succeeds.

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Definitions:

Psychosocial Crisis

Refers to a critical stage in human development where a person must resolve a psychological challenge to progress healthily.

Self-esteem

One's overall subjective emotional evaluation of their own worth, encompassing beliefs and emotions about oneself.

Parental Praise

Positive reinforcement provided by parents to their children, acknowledging good behavior or achievement.

Interpersonal Therapy

A form of psychotherapy that focuses on improving communication patterns and how they relate to an individual's mental health issues.