Chapter 5 Quiz

It refers to a public authority or government agency responsible for exercising autonomous authority over some area of corporate activity in a regulatory or supervisory capacity.

• Financier

• Watchdog

• Regulatory Agency

• Corporate citizenship

It refers to corporations and other business entities, private or public, offering the same product or services that the company is offering.

• Conflict of interest

• Competitors

• Self-Interested behavior

• Adverse selection

It refers to independent organizations trying to police a particular industry or corporate conduct to make certain that the activities of these companies are accordance with the acceptable standards and existing laws.

• Financier

• Watchdog

• Regulatory Agency

• Corporate citizenship

Another identified problem in principal-agent relationship is the insufficiency of information normally obtainable to the principal and agents.

• Conflict of Interest

• Managerial Opportunism

• Agency Theory

• Adverse Selection

It suggests that the firm can be viewed as a loosely defined contract between resource providers and the resource controllers.

• Conflict of Interest

• Managerial Opportunism

• Agency Theory

• Adverse Selection

In time when corporation issues and sells new securities to increase funds, the offering is called a ______________.

• Primary Issue

• Stock Exchange

• Financier

• Investment Banker

The agent responsible for finding buyers for these securities for sale.

• Primary Issue

• Stock Broker

• Financier

• Investment Banker

It suggest that the firm can be viewed as a loosely defined contract between resource providers and the resource controllers. 

• Managerial Opportunism

• Agency Theory

• Diversification

• Shareholders

It is the kind of comfort that agents are taking pleasure from that would sometimes make them lose their balance.

• Trust

• Power Supremacy

• Technical Expertise

• Managerial Opportunism

Agency theory suggests that, in imperfect labor and capital markets, executives and managers will seek to make the most out of their own _________ at the expense of corporate shareholders.

• Trust

• Value

• Investment

• Finance