When a Worker Announces That He Plans to Quit,say Next

question 5

Multiple Choice

When a worker announces that he plans to quit,say next month,the "threat" of being fired has no bite.The worker may find it in his interest to shirk.What can the manager do to overcome this problem?

• A) Fire the worker as soon as he announces his plans to quit.
• B) Provide the worker some rewards for good work that extend beyond the termination of employment with your firm.
• C) Monitor the worker more often than usual and fire him when he is caught shirking.
• D) Pay the worker some rewards when he announces his plan to quit.

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Definitions:

Efficient Market Hypothesis

A theory stating that financial markets are “informationally efficient,” meaning prices fully reflect all available information.

Abnormal Returns

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Positive Abnormal Returns

Returns on an asset or portfolio that exceed the benchmark or expected return given its risk level.

Vanguard Index 500

A mutual fund that aims to mirror the performance of the S&P 500, managed by Vanguard.