Incentives Fail to Be Effective If They Become So Regular

question 53

Multiple Choice

Incentives fail to be effective if they become so regular and so expected by the recipients that they become ______.

• A) entitlements
• B) bonuses
• C) paychecks
• D) merit pay

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Definitions:

Hedge Ratio

The proportion of a position or investment that is hedged, aiming to reduce risk exposure.

Hedge Ratio

The ratio that compares the value of the position protected via a hedge to the size of the entire position itself.

Dollar Change

The difference in an asset's price when compared to a previous price, often used to quantify gains or losses in securities.

Hedge Ratio

The ratio of the size of a position in a hedging instrument to the size of the position being hedged, used to minimize risk.