Which of the Following Is True About Outcome-Oriented Contracts

question 16

Multiple Choice

Which of the following is true about outcome-oriented contracts?

• A)They require more supervision than behavior-oriented contracts.
• B)When profits drop,agents' compensation goes up in outcome-oriented contracts.
• C)Agents do not demand compensating wage differentials in such contracts.
• D)Agents face minimal risks in such contracts.
• E)They are typically a major component of executive compensation.

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Definitions:

Straddle

A financial strategy involving the simultaneous purchase or sale of call and put options with the same expiration date and strike prices.

Lag Strategy

A business approach where the decision to increase capacity is delayed until demand has proven to sustain at a higher level.

Subcontractors

Third-party businesses or individuals hired to perform part of the work that was originally contracted by another company.

New Facilities

Refers to the construction or opening of new physical buildings or infrastructure for business or operational use.