One Way a Manager Can Reduce an Agent's Risk Is

question 61

Multiple Choice

One way a manager can reduce an agent's risk is to tie:

• A) penalties more closely to the agent's effort.
• B) bonuses more closely to the agent's sales.
• C) rewards more closely to the actions that the agent can control.
• D) pay directly for past performance.

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Definitions:

Effective Yield

The total yield on an investment, taking into account all compounding periods, fees, and other factors affecting the actual return.

Stated Rate

The interest rate declared on a financial instrument, such as a bond or loan, not taking into account compounding or fees.

Par

The face value of a bond or security, often used in the context of bonds trading at, above, or below their issued price.

Market Rate

The prevailing interest rate available in the marketplace for similar financial instruments or loans.