What Happens to an Option If the Underlying Stock Has

question 30

Multiple Choice

What happens to an option if the underlying stock has a 3-for-1 split?

• A)There is no change in either the exercise price or in the number of options held.
• B)The exercise price will adjust through normal market movements; the number of options will remain the same.
• C)The exercise price would become one-third of what it was, and the number of options held would triple.
• D)The exercise price would triple, and the number of options held would triple.

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Definitions:

Psychological Term

A word or phrase used to describe a concept within the field of psychology.

Maladaptive Personality Traits

Maladaptive Personality Traits are characteristics that negatively affect an individual's ability to function in various life domains, including work, relationships, and mental health.

Psychological Discomfort

A state of emotional or mental uneasiness, distress, or suffering that arises from various sources including stress, anxiety, or cognitive dissonance.

Functioning Well

Operating or performing in an effective and efficient manner according to expected standards or benchmarks.