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Which of the Following Describes an Agency Bias

Question 48

Multiple Choice

Which of the following describes an agency bias?


A) John has been studying the telecommunications industry and a certain stock in particular. He sees no way that the stock price will not increase by 50% by the end of the year, and he
Invests his entire investment funds in it.
B) The CEO of a corporation requests her own private jet, separate from the private jet that flies other members of the executive team, arguing that it allows her to focus better when
Flying to a meeting.
C) A certain project will cost $500 and is expected to return $1,000 at the end of one year--a 100% return on the investment. A second project will cost $1,500 and is expected to return
$2,700 next year. Noting that the second project returns only 80%, a manager decides to
Undertake the first project since the projects are mutually exclusive.
D) Both B and C describe agency biases.

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