Agency Loss: Definition & Examples


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question 1 of 3

The difference between the best possible outcome for the principal and the actual consequences of the agent's actions, is called _____

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1. The _____ relationship is when one party authorizes the other party to act on his or her behalf.

2. With corporations, shareholders would be the _____ and management would be the _____

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About This Quiz & Worksheet

This worksheet/quiz combination will assess your grasp of agency loss. For the quiz, you'll be responsible for such topics as a term for the difference between the best outcome for the principal and the consequences of an agent's actions and the relationship where one party acts on another's behalf.

Quiz & Worksheet Goals

The quiz will cover the following points of study:

  • Roles filled by shareholders and managers in a corporation
  • Reasons for unintended consequences in a principal/agent relationship
  • Examples of this kind of a relationship

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related lesson on agency loss
  • Making connections - use understanding of the concept of a corporation's management and how it's connected to its shareholders
  • Information recall - access the knowledge you've gained regarding the professional relationship of one person acting on another's behalf

Additional Learning

Gain more information on the subject from the lesson entitled Agency Loss: Definition & Examples. The following topics will be discussed:

  • Example of responsibility associated with a multi-national apartment leasing company
  • Details about a relationship between a shareholder and management for a company
  • Responsibility of a portfolio manager