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:

Diurnal

Describing organisms active during the day and resting at night; also pertains to daily cycles of light and darkness.

Biological Clocks

Biological clocks are internal mechanisms in organisms that regulate cycles of activity and rest, including sleep-wake cycles and hormonal changes, in accordance with environmental changes.

Environmental Cues

Signals from the environment that can affect the behavior and physiology of organisms.

Biological Rhythms

Innate, cyclical patterns in biological processes and behaviors observed in living organisms, including circadian rhythms and seasonal cycles.