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.

---

Definitions:

Beginner's Mind

An approach or attitude of openness, eagerness, and lack of preconceptions when studying a subject or engaging in an activity, much as a beginner would.

Make No Assumptions

A principle emphasizing the importance of approaching situations and interactions without preconceived beliefs or biases.

Unique Experiences

Experiences that are distinct and not common to most individuals, often contributing to personal growth or understanding.

Defining Goals

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives in therapy or personal development.