Match the term within the parantheses that best matches each of the following description. 1. Expenditure on research and development
2. A bank loan
3. Listed on a stock exchange
4. Has limited liability
5. Responsible for bank relationships
6. Agency Cost
A. Investment decision
B. Financial asset
C. Public corporationd
D. Corporatione
E. The treasure
F. The cost resulting from conflicts of interest between managers and shareholders.

The answer is

1. Expenditure on research and development (A. Investment decision)

2. A bank loan (B. Financial asset)

3. Listed on a stock exchange (C. Public corporation)

4. Has limited liability ( D. Corporation)

5. Responsible for bank relationships ( E. The treasure)

6. Agency Cost (F. The cost resulting from conflicts of interest between managers and shareholders)

Explanation:

1. Expenditure on research and development. (A. Investment decision. Investment decision relates to expenditure on a long-term goal.)

2. A bank loan (B. Financial asset. Businesses that obtain bank loans owns and controls it and makes the decision on how to use it)

3.Listed on a stock exchange( C. Public corporation. Companies that have their stocks traded on exchange are public companies.)

4. Has limited liability (D. corporation/partnership. No distinct separation between the owner and the business)

5. Responsible for bank relationships (E. The treasurer. This person maintains the relationship between the bank and business)

6. Agency Cost ( F. The cost resulting from conflicts of interest between shareholders and managers of the business. The managers of the business are known as the agents)

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