Which of the Following Reasons Would NOT Explain the Difficulty

question 56

Multiple Choice

Which of the following reasons would NOT explain the difficulty of determining appropriate executive compensation?

• A) The decisions made by top-level managers are typically complex and nonroutine.
• B) An executive's decisions often affect firm performance only over the long run.
• C) A number of factors intervene between top-level management decisions and firm performance (e.g., unpredictable economic, social, or legal changes).
• D) The compensation committee may not have comprehensive firm performance data.

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Definitions:

Fixation

An obsessive focus or attachment to a person, idea, or object that impedes psychological development.

Algorithms

Algorithms are defined sequences of instructions or rules designed to solve specific problems or accomplish particular tasks effectively and efficiently.

Cognition

The cognitive process of gaining awareness and comprehension via thinking, experiencing, and sensory perception.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.