As Part of Her Compensation Package, Mariana Was Granted the Rights

question 96

Multiple Choice

As part of her compensation package, Mariana was granted the rights to purchase shares of her organization's stock at an established price for a fixed period of time. What type of compensation is this?

• A) Executive perks
• B) Share appreciation rights
• C) Stock options
• D) Phantom stock

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Definitions:

Warrant

A financial instrument that gives the holder the right, but not the obligation, to buy a company's stock at a specific price before a certain date.

Convertible Bond

A financial instrument that can be transformed into a certain number of the issuer's shares at various points in its existence, most often per the discretion of the individual possessing the bond.

Putable Bond

A type of bond that gives the holder the option to require the issuer to repurchase the security before its maturity date at a predetermined price.

American Options

Financial derivatives that can be exercised by the holder at any time before they expire.