Which of the Following Statements Is False

question 3

Multiple Choice

Which of the following statements is false?

• A) Increasing the pay-for-performance sensitivity comes with the added benefit of reducing managers' risk.
• B) Stock and option grants give managers a direct incentive to increase the stock price to make their stock or options as valuable as possible.
• C) By tying compensation to performance, the shareholders effectively give the manager an ownership stake in the firm.
• D) During the 1990s, most companies adopted compensation policies that more directly gave managers an ownership stake by including grants of stock or stock options to executives.

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Definitions:

Imported Items

Goods brought into a country from abroad for sale.

Tariff

A tax imposed by a government on goods and services imported from other countries to protect domestic industries or to generate revenue.

Import Quotas

Limits set by a government on the amount or value of certain goods that can be imported into a country, usually to protect domestic industries.

Voluntary Export Restraints

These are self-imposed limits by exporting countries on the volume of their exports to a particular country, usually to avoid stricter trade barriers.