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

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.