You Recently Transferred from a Smaller Manufacturing Firm to a Larger

question 36

Multiple Choice

You recently transferred from a smaller manufacturing firm to a larger one and discovered that,although entirely different,both compensation systems are effective.How is this possible?

• A) Both companies have well-trained managers.
• B) Both companies do similar work and hire the same kinds of employees.
• C) Both systems fit the organization and its strategy.
• D) Both provide compensation packages that lead the marketplace.

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Definitions:

Strike Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset, until the option expires.

Call Contract

A financial agreement giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specific price within a specific time period.

Ticker Symbol

A unique series of letters assigned to a security for trading purposes.

CBOE Option Contract

A contract that gives the holder the right to buy or sell a specific quantity of a security at a specified price on or before a certain date, traded on the Chicago Board Options Exchange.