Because agents may not set the same goals and objectives as principals, organisations may experience which of the following general agency costs?
I $\text {Goal aligriment costs}$
II $\text {costs caused by excharige rate movernents}$
III $\text {Monitoring costs}$
A) II and III only
B) III only
C) I and III only
D) I, II, and III

Question

Because agents may not set the same goals and objectives as principals, organisations may experience which of the following general agency costs?
 I $\text {Goal aligriment costs}$
II $\text {costs caused by excharige rate movernents}$
III $\text {Monitoring costs}$
A) II and III only
B) III only
C) I and III only
D) I, II, and III

Quizplus · Accepted Answer

I (Goal alignment costs) and III (Monitoring costs) are direct consequences of the principal-agent problem, where agents may not naturally align with the principals' goals, leading to costs associated with aligning these goals and monitoring agent behavior to ensure compliance. II (costs caused by exchange rate movements) is unrelated to the principal-agent problem and is more associated with international finance risks.

Because Agents May Not Set the Same Goals and Objectives Goal aligriment costs\text {Goal aligriment costs}Goal aligriment costs

Because Agents May Not Set the Same Goals and Objectives $\text {Goal aligriment costs}$