According to agency theory,employment contracts will balance three factors that include ________.
A) cost-benefit, risk and uncontrollable factors
B) goal congruence, incentive and risk
C) cost of measuring performance, cost-benefit and risk
D) incentive, risk and cost of measuring performance

Question

Quizplus · Accepted Answer

Agency theory suggests that employment contracts aim to balance incentives (to motivate the agent), risk (distribution between the principal and agent), and the cost of measuring performance (monitoring and ensuring the agent's actions align with the principal's interests).

According to Agency Theory,employment Contracts Will Balance Three Factors That