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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