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Agency Theory Quiz

Authored by DAYANG NUR ALIYA MAISARAH BINTI MOHAMAD MUDANORAN

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Agency Theory Quiz
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15 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does agency theory primarily explain?

The relationship between shareholders and customers

The relationship between employees and employers

The relationship between managers and their teams

The relationship between principals and agents

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What motivates both principals and agents according to agency theory?

Loyalty

Altruism

Teamwork

Self-interest

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a potential conflict in the relationship between shareholders and management?

Management always maximizes shareholder value

Management may pursue personal growth over shareholder profit

Shareholders have complete control over management decisions

Management is not accountable to shareholders

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the context of agency theory, who are considered the principals?

Managers

Employees

Shareholders

Clients

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is one example of agency problems?

Clients always receiving the best investment advice

Managers expanding a company for personal reputation

Shareholders always agree with management

Employees working harder when unsupervised

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is meant by information asymmetry in agency theory?

Agents know more about day-to-day operations than principals

Both parties have equal information

Principals know more than agents

Information is shared equally

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is one solution to agency problems?

Incentives linked to principals' goals

Complete independence of agents

Lack of monitoring

No contracts between parties

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