- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 3. Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
- Subject 1. Shareholder Conflicts and Management
CFA Practice Question
The agency theory can be applied in the relationships between ______.
II. top management and lower levels of management
III. stockholders and debtholders
I. stockholders and senior management
II. top management and lower levels of management
III. stockholders and debtholders
Correct Answer: I and II
II: An agency relation is established whenever top management delegates authority to lower levels of management.
User Contributed Comments 1
| User | Comment |
|---|---|
| zriddle | Its all about delegating authority |