Which of the following can be used to alleviate an agency problem? A. Passing a law that severely restricts takeover activity in the country in which the company operates B. None of the answers are correct C. Asking managers to take on more risk than they are comfortable taking D. Compensating managers in such a way that acting in the best interest of shareholders is also in the best interest of managers E. Giving the CEO a dual role as both the Chief Executive Officer and the Chairman of the Board of Directors QUESTION 7 Which one of the following statements is incorrect about the effective annual rate (EAR)? A. The EAR is the true cost of borrowing and lending B.EAR is defined as the annual growth rate that takes compounding into account OCEAR is the same as APR when annual compounding is used D. The EAR conversion formula accounts for the number of compounding periods and, thus, effectively adjusts the annualised interest rate for the time value of money E. None of the answers are incorrect