The Existence of the Principal-Agent Problem

question 97

Multiple Choice

The existence of the principal-agent problem

• A)increases the risk of buying stock in a corporation.
• B)increases the risk of becoming the sole proprietor of a business.
• C)implies that managers that have the same incentives as the board of directors.
• D)does all of the above.

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Definitions:

Chan Buddhist

A tradition of Buddhism originating in China, emphasizing meditation, intuition, and sudden enlightenment, known in Japan as Zen Buddhism.

Song Emperors

Rulers of the Song Dynasty, which was a culturally rich and sophisticated period in China from 960 to 1279 CE.

Marquise of Dai

Refers to Lady Dai (Xin Zhui), a noblewoman during the Han Dynasty in China, whose well-preserved mummy and extravagant tomb were discovered in 1971.

Funeral Banner

A piece of cloth, often elaborately decorated, used in funeral ceremonies as part of the burial rites to signify honor or represent the deceased.