Which of the Following Is True When Compensating Employees with Company

question 53

Multiple Choice

Which of the following is true when compensating employees with company equity?

• A)The equity to be issued will be considered salary and not subject to securities laws.
• B)The equity will be considered a gift since no cash was issued.
• C)The shares may be considered a taxable item.
• D)The shares cannot be tied to performance of services.

---

Definitions:

Passive Strategy

A portfolio decision that avoids any direct or indirect security analysis. See passive management.

Index Funds

Investment funds designed to replicate and track the components of a market index.

Sharpe Measure

A financial metric used to measure the performance of an investment compared to its risk, indicating how much excess return you are receiving for the extra volatility endured by holding a riskier asset.

Mean-Variance Analysis

Evaluation of risky prospects based on the expected value and variance of possible outcomes.