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There Are Two Different Kinds of Risk: Passive and Active

question 32

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There are two different kinds of risk: passive and active.


Definitions:

Merit Pay System

A compensation strategy that rewards employees based on their performance, as opposed to factors such as seniority or hours worked.

ESOPs

Employee Stock Ownership Plans, a program that provides a company's workforce with an ownership interest in the company.

Significant Risk

The potential for a substantial negative outcome, affecting health, safety, or the environment.

Shareholders Votes

The rights of shareholders to vote on corporate matters, such as electing directors or approving policies, typically based on the number of shares they own.

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