Companies must pay managers more if the managers bear more risk,assuming the managers are risk averse.

Name: Companies must pay managers more if the managers bear more risk,assuming the managers are risk averse.
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Quizplus · Accepted Answer

This statement is true because risk-averse managers would require compensation to compensate for the additional potential losses they could face due to the increased risk. Higher pay would help offset the greater risk and incentivize managers to take on that risk.

Companies Must Pay Managers More If the Managers Bear More