An Abnormal Return Is Calculated As

question 21

Multiple Choice

An abnormal return is calculated as:

• A) expected return less risk-free rate
• B) expected return less market return
• C) actual return less market return
• D) actual return less expected return

---

Definitions:

Base Wage

The initial rate of pay that an employee receives, excluding additional compensation such as bonuses, overtime, or allowances.

Incentive Compensation Systems

Payment programs designed to motivate employees' performance by aligning their incentives with the organization's goals, typically through bonuses, profit sharing, or stock options.

Work Motivation

The drive or incentive that pushes individuals to attain work-related goals or engage in work tasks.

Gain-sharing Plan

is a system in which employees receive a share of the profits based on the performance of their company or department, intended to increase productivity and align employees' interests with those of the organization.