Which of the Following Types of Incentives Encourages an Employee

question 60

Multiple Choice

Which of the following types of incentives encourages an employee to think as both investor and employee?

• A)Profit-sharing plans
• B)Awards
• C)Cash bonuses
• D)Stock option programs

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Definitions:

Risky-Asset Portfolio

A collection of investments that have a higher risk of loss but also offer the potential for higher returns.

Market Rate

The prevailing interest rate available in the marketplace.

Minimum Variance

Minimum Variance is a portfolio strategy or model that seeks to construct a portfolio with the lowest possible volatility or risk for a given level of expected return.

Unsystematic Risk

The risk associated with a specific company or industry, which can be mitigated through diversification in an investment portfolio.