After Many Horrendous First Dates Arranged Through a Dating Website

question 36

Multiple Choice

After many horrendous first dates arranged through a dating website where I provided minimal information, I have decided to ask my good friends, who know all about me, help me find a companion. By relying on my friends, I am trying to reduce a(n) :

• A) moral hazard problem that became a principal-agent problem.
• B) principal-agent problem that became an adverse selection problem.
• C) principal-agent problem.
• D) adverse selection problem.
• E) moral hazard problem.

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Definitions:

Quick Ratio

Quick ratio, also known as acid-test ratio, is a liquidity metric that indicates a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Return on Assets

A profitability ratio indicating the efficiency with which a company uses its assets to generate net income, calculated by dividing net income by total assets.

Return on Equity

A financial ratio that measures the profitability of a company in relation to shareholders' equity, indicating how effectively equity supports operations and growth.