Which of the Following Is Not a Form of Compensation

question 56

Multiple Choice

Which of the following is not a form of compensation that selling shareholders could receive?

• A) Stock
• B) Cash
• C) Stock options
• D) Fixed income securities

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, also known as non-diversifiable risk or market risk.

Market Risk Premium

The higher return an investor foresees from investing in a market portfolio with associated risks as opposed to choosing completely safe assets.

Risky Asset

An asset that carries a higher degree of risk of loss, but also offers a higher potential return.

Risk-free Asset

An investment with zero risk of financial loss, theoretically providing guaranteed returns, such as government bonds.