question archive 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
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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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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d) Reduce the regulations on the traders so that they have more flexibility in conducting trades
The principle-agent problem is generally occurred due to the problem of accountability and responsibility. Therefore, the banks make a flexible arrangement so that the trading activities could be carried out. It enables them to get involved in more flexible trading practices.
