Which of the Following Statements Regarding the Backdating of Options

question 38

Multiple Choice

Which of the following statements regarding the backdating of options is FALSE?

• A)Backdating refers to the practice of choosing the grant date of a stock option retroactively,so that the date of the grant would coincide with a date when the stock price was at its low for the quarter or for the year.
• B)Unless it is reported in a timely manner to the IRS and to shareholders,and reflected in the firm's financial statements,backdating is illegal.
• C)The use of backdating suggests that some executive stock option compensation may not truly have been earned as the result of good future performance of the firm.
• D)By backdating the option,the executive receives a stock option that is already out-of-the-money,with a strike price equal to the higher price on the supposed grant date.

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Nature and Nurture

The debate concerning the relative importance of an individual's innate qualities versus personal experiences in determining or causing differences in physical and behavioral traits.

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Changes in the genetic sequence of an organism, which can lead to differences in physical or behavioral traits.