Provide answers to the following five questions using your own words. Be concise and to the point.

Discuss different examples of a conflict of interest between managers and shareholders

Explain how a managers risk aversion, effort aversion, and self-interests can affect his/her decision making

Identify and explain main objectives of management compensation

Explain how management compensation can provide an incentive to unethical and/or undesirable behavior. What methods can be used to reduce the chance of unethical activities resulting from compensation plans?

Which financial and non-financial measures would you include in a management compensation contract? Why?