In the Principal-Agent Relationship Between Savers and a Borrowing Firm

question 58

True/False

In the principal-agent relationship between savers and a borrowing firm the savers are the agents and the borrowing firm is the principal.

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Definitions:

Virtue

A quality considered morally good or desirable in a person.

Kohlberg Construct

A theoretical framework concerning the stages of moral development formulated by psychologist Lawrence Kohlberg.

Personal Ethics

The principles that an individual considers in distinguishing right from wrong and in making decisions based on these principles.

Management Team

A group of individuals at the top of an organization who coordinate their efforts to achieve strategic and operational goals.