Question

The​ principal-agent problem occurs when

A. the principal gives an agent conflicting objectives which the agent is unable to fulfill.
B. an agent pursues his​ principal's interests rather than his own interests.
C. a​ firm's shareholders fulfill their own interest rather than the interests of top management.
D. an agent pursues his own interests rather than the interests of the principal who hired him.

Answer 1

D. an agent pursues his own interests rather than the interests of the principal who hired him.

Step-by-step explanation:

The principal agent problem arises when there is a conflict of interest between a group and their principal delegate appointed to act on their behalf.