A Better Way to Approach the Control of Discretion May

question 86

Multiple Choice

A better way to approach the control of discretion may involve the use of ______ to promote voluntary compliance with policies concerning discretion.

• A) surveys
• B) polls
• C) written reprimands
• D) incentives

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Definitions:

Arbitrage Opportunities

Arbitrage Opportunities arise when a financial instrument, or combination of instruments, can be bought and sold simultaneously in different markets for a risk-free profit due to price discrepancies.

Factor Betas

Measures of a security's sensitivity to various risk factors, indicating how much the security's returns are expected to change with those factors.

Multifactor APT

A model that describes the expected return on a security based on its exposure to multiple risk factors and the risk premia associated with those factors.

Macro Factors

Macro Factors are large-scale, national, or international elements or forces that affect the economy or the financial markets, such as inflation, unemployment, and fiscal policy.