Question: Investment management faces the principal - agent problem. Question 1 2 Answer a . The agent refers to the investment manager, and the principal is

Investment management faces the principal-agent problem.
Question 12Answer
a.
The agent refers to the investment manager, and the principal is the person on behalf of whom the investment manager is investing.
b.
The principal refers to the investment manager, and the agent is the person on behalf of whom the investment manager is investing.
c.
The principal-agent problem refers to the fact that the investment manager, who is the agent, does not always implement correct principals while investing.
d.
The point of the principal-agent problem is that the investment managers acts both as a principal and as an agent.

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