Traditionally, Wall Street investment banks in the United States had been organized as partnerships, but by 2000 they had converted to being publicly traded companies.As partnerships, the principal-agent problem is ________ because there is ________ separation of ownership from control.

Question

Quizplus · Accepted Answer

As partnerships, there is a reduced principal-agent problem because there is much less separation of ownership from control. Therefore, the conversion to publicly traded companies increased the principal-agent problem and caused a greater separation of ownership and control.

Traditionally, Wall Street Investment Banks in the United States Had