Performance Measures

question 12

Multiple Choice

Performance measures:

• A)are critical in designing a reward system
• B)are unimportant in designing a reward system
• C)always influence people to achieve them
• D)are always worded vaguely
• E)are not needed to provide incentives because employees always want to do the right thing

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Definitions:

Equity

The owners' stake in a company, represented by the amount of capital contributed plus any profits or minus any losses.

Debt

Debt represents money borrowed that must be repaid, typically with interest, by the borrower to the lender.

CAPM Beta

CAPM Beta is a measure used in the Capital Asset Pricing Model to determine the volatility or systemic risk of an asset in relation to the market as a whole.

Expected Return

Expected return is the predicted amount of profit or loss an investment is anticipated to generate over a specific period.