Agency Theory Is Concerned with Resolving Two Problems That Can

question 67

Multiple Choice

Agency theory is concerned with resolving two problems that can occur in agency relationships.Which of the following is not one of those problems?

• A) Goals conflict between principals and agents.
• B) Verification of actual agency activity is expensive and difficult to obtain.
• C) Principals and agents have differing attitudes toward risk.
• D) Stockholders and management align with external stakeholders.

---

Definitions:

Subject-Matter Jurisdiction

The power of a court over the type of case presented to it.

In Rem

A legal term referring to actions or judgments that apply to a piece of property directly, rather than against a person.

Sliding-Scale Standard

A method of adjusting the level of strictness or leniency in the application of a rule or standard based on specific conditions or factors.

Minimum-Contacts Standard

A legal principle determining whether a court in one jurisdiction can claim personal jurisdiction over a defendant from another jurisdiction, based on the defendant's activities within the former jurisdiction.