Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A)The substantial use of stock and option grants in the 1990s greatly increased managers' pay-for-performance sensitivity.
• B)The optimal level of sensitivity of managers' compensation to the performance of their firms depends on the managers' level of risk aversion,which is hard to measure.
• C)While decreasing managers' risk exposure,increasing the sensitivity of managerial pay and wealth to firm performance does have some negative effects.
• D)In the absence of monitoring,the other way the conflict of interest between managers and owners can be mitigated is by closely aligning their interests through the managers' compensation policy.

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Definitions:

Desired Response

The preferred or intended outcome or reaction to a specific stimulus or set of circumstances.

Intermittent Reinforcement

A conditioning schedule where rewards or punishments are given out irregularly, which can strengthen behavior.

Learned Helplessness

A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed.

Generalization

The process of applying the findings or conclusions from specific instances to broader contexts or populations.