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CIMAPRA17-BA1-1 Exam - Topic 1 Question 92 Discussion

Which ONE of the following is NOT a symptom of the principal-agent problem in company XYZ?
C) The family of the Chief Executive of XYZ use the company jet for shopping trips
A) The pay of the directors of XYZ is not related to the company's financial performance
B) XYZ loses money following a risky investment in a new line of business
D) XYZ's Board conceals information about losses from shareholders

CIMAPRA17-BA1-1 Exam - Topic 1 Question 92 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam
Question #: 92
Topic #: 1
[All CIMAPRA17-BA1-1 Questions]

Which ONE of the following is NOT a symptom of the principal-agent problem in company XYZ?

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Suggested Answer: C

by Taryn at Jul 10, 2024, 11:18 PM

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Kattie
8 months ago
The CEO's family using the jet for shopping? That's wild!
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Carman
8 months ago
Concealing info from shareholders is a huge issue, but A is still worse.
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Laurene
8 months ago
Wait, are we sure about that? Seems like all options are bad!
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Micaela
8 months ago
Definitely A, that’s a clear red flag.
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Audry
9 months ago
Directors' pay not tied to performance? Classic symptom.
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Sylvie
9 months ago
Concealing information from shareholders definitely sounds like a symptom of the principal-agent problem, so I’m leaning towards option A as the one that doesn't fit.
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Felicidad
9 months ago
I feel like option C could be a symptom too, since it shows misuse of company resources, but I need to think more about the definitions.
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Hyun
9 months ago
I'm not entirely sure, but I remember that risky investments can be a symptom of the principal-agent problem, so option B might not be the answer.
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Carla
9 months ago
I think the principal-agent problem is about misaligned incentives, so maybe option A is the right answer since it mentions pay not being related to performance.
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Gussie
9 months ago
I'm pretty confident I know the answer to this one. The principal-agent problem is all about the managers (agents) not aligning their interests with those of the owners (principals). So the option that doesn't involve the managers acting in their own interests is the correct answer.
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Arlie
9 months ago
Okay, I've got this. The principal-agent problem arises when the managers (agents) pursue their own interests rather than those of the owners (principals). So the option that is not a symptom of this problem is the one that doesn't involve the managers acting in their own self-interest at the expense of the owners.
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Bong
9 months ago
Hmm, I'm a bit confused by this question. The principal-agent problem is about the conflict of interest between the company's owners (principals) and its managers (agents). I'll need to carefully review the options to determine which one is not a symptom of this problem.
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Staci
9 months ago
This question seems pretty straightforward. I think the key is to identify the symptoms of the principal-agent problem and then determine which one is not a symptom.
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Twila
10 months ago
Wait, where exactly do I find the Delivery options group? I want to make sure I'm in the right place before I start clicking around.
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Elroy
10 months ago
Okay, I've got this. Inherent risk is the risk before any controls are in place, so that's not the right answer here. I'll eliminate that one first.
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Glory
10 months ago
Hmm, I'm a little unsure about this one. The options seem to cover a range of different approaches to data quality. I'll need to carefully consider how each one could help establish a baseline.
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Ashlee
10 months ago
I know H.245 is definitely one of the protocols, but I keep mixing up the second one. Was it SDP or Q.931?
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France
1 year ago
I'd say D is the correct answer. Concealing information from shareholders is definitely a symptom of the principal-agent problem, where the managers are not acting in the best interests of the owners.
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Merrilee
1 year ago
C) The family of the Chief Executive of XYZ use the company jet for shopping trips
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Earleen
1 year ago
B) XYZ loses money following a risky investment in a new line of business
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Nickole
1 year ago
A) The pay of the directors of XYZ is not related to the company's financial performance
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Domitila
1 year ago
Haha, the company jet for shopping trips? That's a bold move! But I guess it does fit the principal-agent problem where the managers put their own interests ahead of the shareholders'.
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Moira
1 year ago
D) XYZ's Board conceals information about losses from shareholders
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Octavio
1 year ago
C) The family of the Chief Executive of XYZ use the company jet for shopping trips
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Royal
1 year ago
B) XYZ loses money following a risky investment in a new line of business
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Elizabeth
1 year ago
A) The pay of the directors of XYZ is not related to the company's financial performance
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Rory
1 year ago
Hmm, I'm not sure. The family using the company jet for shopping trips seems like a clear case of the principal-agent problem to me. Maybe I should double-check my understanding of this concept.
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Alonso
1 year ago
I think the answer is B. The principal-agent problem is about misaligned incentives between the owners and the managers, not about the company's financial performance.
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Alberto
1 year ago
B) XYZ loses money following a risky investment in a new line of business
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Joesph
1 year ago
A) The pay of the directors of XYZ is not related to the company's financial performance
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Dawne
1 year ago
I'm not sure, but I think the answer is C.
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Tarra
1 year ago
I disagree, I believe the answer is D.
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Lorriane
1 year ago
I think the answer is B.
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