If a Company Makes a Payment to a Foreign Government

question 11

Multiple Choice

If a company makes a payment to a foreign government official to ensure that goods that are not entitled to be exported into that country are indeed allowed to enter that country,the company has given:

• A) A facilitation payment
• B) An unlawful referral fee
• C) A lawful referral fee
• D) A bribe

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Definitions:

Market Portfolio

A market portfolio is a theoretical bundle of all investable assets in the market, with each asset weighted according to its market capitalization, representing the entire market or a significant segment of it.

Risk-Free Return

The theoretical return attributed to an investment with zero risk, often represented by the yield on government securities.

Jensen Measure

A risk-adjusted performance measure that calculates the average return on a portfolio or fund over and above that predicted by the Capital Asset Pricing Model (CAPM), given the portfolio's or fund's risk.

Market Portfolio

A theoretical bundle of investments that includes every asset in the market, weighted by market capitalization; often used as a benchmark in the capital asset pricing model (CAPM).