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In an ownermanager agency relationship the problem of risk aversion arises because: a. managers prefer to make decisions that are less risky for the entity
In an ownermanager agency relationship the problem of risk aversion arises because:
a. managers prefer to make decisions that are less risky for the entity as they have more to lose than the shareholders.
b. shareholders generally have no other sources of income.
c. managers have less capital invested in the entity than shareholders.
d. shareholders prefer the managers to take fewer risks in order to maximise the returns on their investment.
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