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for The_Writer.

What term best describes an agent who is indifferent between a sure thing and a gamble of equal expected value?

A.

Risk seeking

B.

Risk averse

C.

Risk sharing

D.

Risk premium

E.

Risk neutral

Which of the following terms describes a contract by which the value of the compensation depends on the measured performance of the employee?

A.

Implicit incentive contract

B.

Explicit incentive contract

C.

Risk sharing contract

D.

Pay-for-performance contract

E.

Compensation contract

Which of the following terms describes a phenomenon whereby individuals ignore their own information about the best course of action and instead simply do what everyone else is doing?

A.

Relative performance

B.

Herding

C.

Pay-for-performance

D.

Absolute performance

E.

Risk sharing

Which of the following terms describes a contract based on information that cannot be observed by courts or arbitrators?

A.

Pay-for-performance

B.

Risk sharing contract

C.

Explicit incentive contract

D.

Implicit incentive contract

E.

Compensation contract

What type of performance measurement based process was used to determine Jack Welch s successor, Jeffrey Immelt, as CEO of GE?

A.

Merit ratings system

B.

Promotion tournament

C.

Ratings compression

D.

Management-by-objective system

E.

360-degree peer review system

Which of the following terms best describes a contract that guarantees an agent some payment, but provides enough incentive so that the agent does not shirk?

A.

Risk premium contract

B.

Risk-averse contract

C.

Risk-sharing contract

D.

Variability reduction contract

E.

Certainty equivalent contract

What term best describes the payment which must be offered to a risk-averse individual to willingly accept a gamble?

A.

Certainty equivalent

B.

Risk equivalent

C.

Certainty payment

D.

Risk preference payment

E.

Risk premium

for The_Writer