According to the Agency View,the Objective of a Good Incentive

question 108

Multiple Choice

According to the agency view,the objective of a good incentive compensation system is to minimize agency costs by balancing the costs of controls and

• A)disincentives against the risks of divergent behavior.
• B)incentives against the risks of divergent behavior.
• C)incentives against the cost of divergent behavior.
• D)disincentives against the cost of divergent behavior.

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Definitions:

Competent

Having the necessary ability, knowledge, or skill to perform a task successfully.

Conceited

Holding an excessively favorable opinion of one's abilities, appearance, or worth.

Social Schema

Frameworks that people use to organize and understand social information and interactions based on past experiences.

Logical Assumption

A proposition that is taken for granted as true in the absence of proof for the sake of argument or further study.