- CFA Exams
- 2021 CFA Level I Exam
- Study Session 10. Corporate Finance (1)
- Reading 31. Introduction to Corporate Governance and Other ESG Considerations
- Subject 3. Principal-Agent and Other Relationships in Corporate Governance
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 |