To Retain Its Key Middle Managers and to Reduce the Effect

question 3

Multiple Choice

To retain its key middle managers and to reduce the effect of a bank closure on its incomes,X Bank has established a two-year severance pay package.Theoretically,the bank is motivating employees to stay with the company through

• A) positive reinforcement.
• B) continual,repetitive reinforcement.
• C) negative reinforcement.
• D) extinction.
• E) disciplinary reinforcement.

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Definitions:

Time To Expiration

The duration remaining until the expiry of a contract, particularly relevant for options and other derivatives.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a certain time frame.

Exercise Price

The predetermined price at which the holder of an option can buy or sell the underlying asset.

American Put Option

A financial contract that gives the holder the right to sell a specified amount of an underlying asset at a predetermined price before or at the expiration date.