Question

Which one of the following is (an) example(s) of agency problem?

		Many families hire nannies to take care of their child(ren) and later find that their child(ren) was (were) abused by the nanny.
		The CEO of your firm decides to invest heavily into AI technology. Although your firm has no related experience at all, he can increase get promoted quickly.
		A venture capital invested $10million with a startup pharmaceutical company so that the firm can conduct R&D on a new cancer drug. Upon receiving the money, the firm CEO purchased a private jet for himself.
		All of the above

Answer 1

The agency problem is a conflict of interest inherent in any relationship where one party is expected to act in another's best interest.

* as nannies could not perform their duties well, therefore it is an example of agency problem

* this do not highlight any conflict

*this can be an example of agency problem as investment was made for the purpose of conducting R&D on cancer drug but the CEO purchased a private jet for himself this can lead to a conflict.