When Should Managers Be Left Out of the Gain-Sharing Plan

question 22

Multiple Choice

When should managers be left out of the gain-sharing plan?

• A) When they receive other types of bonuses.
• B) When the company is unionized.
• C) When they do not play a significant role in gain achievement.
• D) When approval of the plan is outside the jurisdiction of their department.

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Definitions:

Basis

The difference between the spot price of an asset and the futures price of the same asset.

Long Hedger

An investor who purchases futures contracts or the underlying asset to protect against potential price increases.

Short Hedger

An investor who enters into contracts to protect against potential losses from declining prices in the assets they hold.

Decrease

A reduction in quantity, size, or intensity of a particular activity, value, or level.