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1492 terms

Glossary

Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.

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Agency problem

Risk & psychology
Also called: Principal-agent problem

The conflict that arises when one person takes decisions on behalf of another and does not bear the consequences of them.

In plain terms

The textbook version has the agent taking too much risk. Inside a family it usually inverts: the person managing a parent’s money carries the blame without the loss, and takes far too little.

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Indian stock market glossary · Market Vidyalaya