The Problem with Tying Executive Pay to Stock Prices Is

question 39

Multiple Choice

The problem with tying executive pay to stock prices is that:

• A) many factors other than executive effort and ability affect stock prices.
• B) executives can manipulate stock prices.
• C) stock price does not reflect firm performance.
• D) executives prefer more straightforward compensation schemes that reduce their risk.

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Definitions:

Trade Deficit

A situation where a country imports more goods and services than it exports.

Exchange Rate

The price of one currency in terms of another for conversion purposes.

Yuan

The official currency of the People's Republic of China.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by GDP.