Moral Hazard occurs when a person increases its exposure to risk because someone else bears the the cost of those risk(Insurance companies)
Explanation:
Moral Hazard usually occurs when their is information asymmetry,the risk taking party has more information than the risk incurring party.
The financial crisis of 2008 is the best example of the Moral Hazard Problem.
The Moral Hazard Problem arises because the managers of the financial firm took over riskier investments because they believed that the federal government will save them from the bankruptcy.
Answer:
The correct answer is (e)
Explanation:
Task identity is a complete system that involves doing a job and specifying every phase and step from start to finish that helps to attain noticeable result and helps to avoid confusion. It not only helps the company to find the best person for a job, but it also allows employees to achieve satisfaction at their job.
Top down/bottom up budgets, lack of control, poor inventorying, lack of staff investment, over control are the least effective financial management practices in creating and monitoring an operating budget.
The operating budget includes the expenditures and revenues generated by the company's daily business functions. The operating budget focuses on operating expenses, such as the cost of goods sold in the market, also known as the cost of sold goods (COGS), and revenue or income. COGS is the cost of direct labor and direct materials used in the production process.
The operating budget also includes overhead and administration costs that are directly related to manufacturing goods and providing services. However, capital expenditures and long-term loans will not be included in the operating budget. Budgets for sales, production process or manufacturing, labor, overhead, and administration are a few examples of frequently utilized operating budgets.
Learn more about operating budget here:
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Answer:
First Financial would divide the $10,500 loan by the present value of annuity due of 1.
The correct answer is C
Explanation:
Present value of annuity formula is used for determining the amount of loan payment. Since the payments will be made at the beginning of each month, we will apply the formula for present value of annuity due. In order to determine the amount of monthly payment, we will divide the principal by the present value of annuity due of 1.
Answer:
c. The owner of an intellectual property grants its use to a league in exchange for a fee.
Explanation:
Licensing occurs when: owner of an intellectual property grants its use to a league in exchange for a fee.
