The Enron and Tyco scandals are an example of ________.
A) the free-rider problem
B) the adverse selection problem
C) the principal-agent problem
D) the "lemons problem"

Question

Quizplus · Accepted Answer

Enron and Tyco scandals are classic examples of the principal-agent problem where the agents (Enron and Tyco executives) acted in their own interest rather than the shareholders (principals) by manipulating financial statements and engaging in fraudulent activities.

The Enron and Tyco Scandals Are an Example of ________