In the context of agency theory, identify a true statement about agents.
A) They always behave in ways that are consistent with the goals of the owners.
B) They have less information about the day-to-day business than do principals.
C) They are less likely than principals to focus on a short time horizon.
D) They are less likely than principals to take risks when they make decisions.

Question

Quizplus · Accepted Answer

Agents are often more risk-averse than principals because they may prioritize job security and personal benefits over the potential high returns that come with taking risks.

In the Context of Agency Theory, Identify a True Statement