If an agent is risk neutral and a principal is risk averse,which of the following contracts would be efficient in risk bearing?
A) A fixed fee is paid to the agent.
B) A fixed fee is paid to the principal.
C) An hourly rate is paid to the agent.
D) The agent enjoys a share of the profit.

Question

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The Answer of If an agent is risk neutral and a principal is risk averse,which of the following contracts would be efficient in risk bearing?
A) A fixed fee is paid to the agent.
B) A fixed fee is paid to the principal.
C) An hourly rate is paid to the agent.
D) The agent enjoys a share of the profit.

If an Agent Is Risk Neutral and a Principal Is