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(a) [25 marks] What are the features of internal labour markets? Hence, discuss the benefits of long-term relationships between firms and workers. (b) [25 marks]

(a) [25 marks] What are the features of internal labour markets? Hence, discuss the benefits of long-term relationships between firms and workers.

(b) [25 marks] What are share options in the context of CEO compensations? How may share options incentivise CEOs to reach high performance? Illustrate your answer in a diagram showing the value of a share option as a function of the company's share price.

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