Question 10 Which of the following is NOT benefit of an incentive compatible contract? 1.Car drivers may get a lower insurance premium because of a larger deductible. 2. Some borrowers may be able to get loan only because the contract reassures the lender of repayment. 3. The Principal can spend less monitoring and share some of this savings with the Agent. 4. Fewer transactions between Principals and Agents will take place.
Question 10 Which of the following is NOT benefit of an incentive compatible contract? 1.Car drivers may get a lower insurance premium because of a larger deductible. 2. Some borrowers may be able to get loan only because the contract reassures the lender of repayment. 3. The Principal can spend less monitoring and share some of this savings with the Agent. 4. Fewer transactions between Principals and Agents will take place.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 10 Which of the following is NOT benefit of an incentive compatible contract? 1.Car drivers may get a lower insurance premium because of a larger deductible. 2. Some borrowers may be able to get loan only because the contract reassures the lender of repayment. 3. The Principal can spend less monitoring and share some of this savings with the Agent. 4. Fewer transactions between Principals and Agents will take place.
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