There is a certain amount of performance ambiguity inherent in the relationship between a principal and agent.

Question

Quizplus · Accepted Answer

This statement is true. The principal-agent relationship is characterized by a certain level of uncertainty regarding the actions and decisions of the agent, as the principal cannot fully control or monitor the agent's performance. This ambiguity can lead to moral hazard and adverse selection problems, as well as conflicts of interest between the two parties.

There Is a Certain Amount of Performance Ambiguity Inherent in the Relationship