An agency problem is said to exist when there is a conﬂict of interest between _____ and _____.
A) An agent; his or her representative.
B) A broker; a dealer.
C) A principal; his or her agent.
D) One shareholder; another shareholder.
E) A shareholder; a stakeholder.

Question

Quizplus · Accepted Answer

An agency problem arises when there is a conflict of interest between a principal and his or her agent. This can occur when the agent puts their own interests ahead of those of the principal, or when the agent has incentives that do not align with the goals of the principal. This is a common issue in business and can lead to a variety of problems, such as reduced profitability or legal issues.

An Agency Problem Is Said to Exist When There Is