Agency problem
Agency problem also known as agency costs occurs in a two-party relationship (principal/agent) where the agent is expected to act or make decisions for the good of the principal.
For example in a corporate the relationship between the management and shareholders. The management is expected to make decisions that will maximize shareholders interest. The problem arises when the two parties have different interests. In the example above the manager may opt to make his own wealth and not act in the company’s best interest which could be maximizing company’s market value.
Examples of agency relationship in finance
Managers/stockholders
Managers/Creditors
Causes of conflicts between managers and stockholders may include;
Remuneration - low remunerations or fixed salaries despite increased profit margins.
Differences in risk profile- stockholders may prefer high-risk return investments contrary to the managers. When high-risk investment go bad the manager risks job loss
Manipulation of accounting systems- to reflect high profits.
Unnecessary perks management award themselves.
Solution to these problems include threat for firing in case of poor performance, shareholders may also threaten to sell the company, remuneration based on performance, incurring agency costs-these are costs incurred while hiring external auditors, setting a control system, legal costs for employment letters and contracts.
Agency problem may be reduced by motivating the manager to act for the companies best interest by offering incentives
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The american bullfrog is native to much of the eastern united states. this species has successfully begun to spread west as an invasive species. it is thriving in the western united states because of its large size, high mobility, and tremendous reproductive capabilities. american bullfrogs have very generalized eating habits and often eat the same food sources as the native frog species in the western united states, causing a reduction in the overall food supply. the relationship between the american bullfrog and native frog species in the western united states can best be characterized as ______.
Answer: Competition.
Explanation:
The relationship in between the American bull frog and native frog species is competition. This is because the food source is same for both of the species.
There will be competition as invasive species have entered in the region where native species used to live and now the food resources is being shared by both of them.
So, the competition among these two species will increase.
Answer:
somatic cell contains 2 allele for every gene, with one provided by each parent of an organism
