Which of the Following Arguments Opposes the Idea of High

question 39

Multiple Choice

Which of the following arguments opposes the idea of high executive pay?

• A) High salaries provide an incentive for innovation and risk taking.
• B) Not many individuals are capable of running today's large, complex organizations.
• C) Top athletes and entertainers make a lot of money, so top executives should, too.
• D) High salaries divert resources that could be used to invest in the business.

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Definitions:

Non-diversifiable Risk

The portion of risk that can't be eliminated through diversification, often related to systemic factors affecting all investments.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values.

Systematic Risk

Systematic risk refers to the overall market risk that cannot be eliminated through diversification, affecting all investments to some extent.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to a negative balance of trade.