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When Using Incentive Plans,shorter Intervals Between Performance and Rewards Increase

question 18

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When using incentive plans,shorter intervals between performance and rewards increase the motivating power of the plan.


Definitions:

Long Corn Futures

An investment position that speculates on the future price increase of corn by purchasing corn futures contracts.

Delivery Date

The specific date on which a financial transaction or agreement is scheduled to be concluded.

Maintenance-Margin

The minimum amount of equity that must be maintained in a margin account to continue holding positions, preventing a margin call.

Margin Call

A demand by a broker that an investor deposits further cash or securities to cover possible losses.

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