What Two Main Aspects Need to Be Considered to Help

question 44

Multiple Choice

What two main aspects need to be considered to help you determine what you want the executive compensation system to accomplish?

• A) A symbolic aspect and a market aspect
• B) A behavioural aspect and a market aspect
• C) A behavioural aspect and a symbolic aspect
• D) A pay equity aspect and a market aspect

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Definitions:

Mean-Variance Efficient

A portfolio that offers the highest expected return for a defined level of risk or the lowest risk for a given level of expected return, according to modern portfolio theory.

Sensitivity Coefficients

Numeric values representing the sensitivity of a dependent variable, or a portfolio's performance, to changes in an independent variable or specific market factor.

Single-Index Structure

A model used in finance to represent the returns of assets as a linear function of a single market index, reflecting the market-wide sources of risk and return.

Forecast

A prediction or estimate of future events, especially concerning weather, economic trends, or financial performances.