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Q 1/5
Score 0
Which of the following provides INCORRECT description of lemon problem
90
Lemon problem means that if investors require a 6% rate of return to finance a spaceship project managed by Richard Branson (from Virgin Blue), they also require only 6% rate of return to finance the same project managed by an unknown graduate from an average university.
Lemon problem leads to too high required rate of return for good entrepreneur and too low required rate of return for bad entrepreneur
Lemon problem is an asymmetric information problem in which investors have more information than entrepreneurs about the value of business investment opportunities.
With severe lemon problem, good entrepreneurs leave the market and only bad entrepreneurs remain in the market.
Q 2/5
Score 0
Which of the following statement is CORRECT?
90
In a listed company, shareholders are the owners of the company and play the role of the principal. The CEO is hired to manage the company on behalf of shareholders and plays the role of the agent.
In a listed company, shareholders are the managers of the company and play the role of the principal. The CEO is the owner of the company and plays the role of the agent.
In a listed company, shareholders are the owners of the company and play the role of the agent. The CEO is hired to manage the company on behalf of shareholders and plays the role of the principal.
In a listed company, the board of directors is the owner of the company and play the role of the principal. The CEO is the manager of the company and plays the role of the agent.
5 questions
Q.
Which of the following provides INCORRECT description of lemon problem
1
90 sec
Q.
Which of the following statement is CORRECT?
2
90 sec
Q.
Which of the following provides INCORRECT description of agency problem
3
90 sec
Q.
Which of the following provides INCORRECT description of the measures used to alleviate lemon problem
4
90 sec
Q.
Which of the following statement about accounting principles is INCORRECT?
