Which of the following is a problem encountered in a transaction involving a principal/agent relationship?
A)Absence of monitoring and supervision
B)Excessive dependence on forecasts and expectations
C)High investment in industry specific assets
D)Government interference and market volatility

Question

Quizplus · Accepted Answer

In a principal/agent relationship, the agent may act in their own self-interest instead of in the interest of the principal. Without proper monitoring and supervision, the agent may engage in opportunistic behavior that harms the principal.

Which of the Following Is a Problem Encountered in a Transaction