In relation to agency theory the statement that is not correct is:
A) The self-interest of various parties is often in conflict
B) It assumes that managers act opportunistically all of the time
C) It assumes that individuals act primarily to advance their own self-interest
D) None of the statements is incorrect, i.e., all are correct statements

Question

Quizplus · Accepted Answer

Agency theory does not assume that managers act opportunistically all the time. While it acknowledges the potential for agents (such as managers) to act in their own self-interest, agency theory recognizes that managers may also have other motivations and may behave ethically and with fiduciary responsibility towards their principals (such as shareholders).

In Relation to Agency Theory the Statement That Is Not