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What Is the Most Common Form of Performance Pay Used

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What is the most common form of performance pay used by medium to large Canadian firms?


Definitions:

Risk Premium

The risk premium is the extra return above the risk-free rate that investors require to compensate for the risk of holding a risky asset.

Risk Aversion

The tendency of investors to prefer safer investments over riskier ones, indicating their reluctance to take on investments that carry a higher chance of losing value.

Beta

An indication of how much a stock's price fluctuates compared to the broader market.

Portfolio Returns

The overall gains or losses generated by a portfolio of investments over a specific period, assessing the effectiveness of investment choices.

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