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:

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Concepts that do not have a physical or concrete existence but exist as thoughts or notions in the mind.

Communication

The process by which information is exchanged between individuals through a common system of symbols, signs, or behaviors.

Gestures

Facial expressions and bodily postures and motions that convey intended as well as subconscious messages.

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The branch of linguistics concerned with studying and documenting languages, focusing on the structure, usage, and varieties without prescribing norms.