One Way for Banks to Reduce the Principal-Agent Problems Associated

question 134

Multiple Choice

One way for banks to reduce the principal-agent problems associated with trading activities is to

• A)set limits on the total amount of a traders' transactions.
• B)make sure that the person conducting the trades is also the person responsible for recording the transactions.
• C)encourage traders to take on more risk if the potential rewards are higher.
• D)reduce the regulations on the traders so that they have more flexibility in conducting trades.

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Definitions:

Depression

A mental health disorder characterized by persistently low mood and loss of interest in activities, significantly impairing daily life.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting mood, attention, and stress responses.

Mania

A state of abnormally elevated or irritable mood, arousal, and energy levels, often associated with bipolar disorder.

Epigenetic Effects

Variations in how genes are expressed, which are due to factors other than alterations in the DNA sequence.