When the interests of principals and agents are in alignment, the agency problem is small.

Name: When the interests of principals and agents are in alignment, the agency problem is small.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the interests of principals and agents are in alignment, the agents are more likely to act in the best interest of the principals, reducing the risk of conflicts of interest and the agency problem. Hence, the agency problem is small when the interests of principals and agents are in alignment.

When the Interests of Principals and Agents Are in Alignment