Who are the principal(s) in the transaction between Farrah and Troy?

In a real estate transaction, the principals are the main parties who hold a legal interest in the property and are directly involved in the transaction. In this case, Farrah and Troy are both engaged in a transaction with each other, making them the principal parties. Each has an interest in the deal – whether it involves buying, selling, leasing, or otherwise transferring property rights.

Choosing Farrah alone would overlook Troy's essential role as a counterpart in the transaction. Similarly, selecting either Terry or Michael does not apply because they are not part of the ongoing transaction between Farrah and Troy. Therefore, the correct answer encompasses both Farrah and Troy, reflecting their mutual involvement and partnership in the transaction.