Which of the Following Statements Regarding Stock Options Is True

question 122

Multiple Choice

Which of the following statements regarding stock options is true?

• A) An employee will exercise a stock option only when the current market price of the stock is less than the option price.
• B) Unexercised options may be sold or transferred in the open market.
• C) Employee stock options are a restricted form of a call option.
• D) Companies expense stock-based compensation at the fair value of the stock on the expected date of exercise.

---

Definitions:

Negative Reinforcement

A behavioral psychology concept where the removal or avoidance of an unpleasant stimulus strengthens a behavior or makes it more likely to occur.

Punishment by Removal

Punishment by Removal involves decreasing the likelihood of a behavior by removing a desirable stimulus or positive condition following the behavior.

Punishment by Application

A behavioral control technique involving the introduction of an adverse stimulus following an undesired behavior, aiming to decrease that behavior's occurrence.

Maternal Risk Factors

Conditions or behaviors by the mother that can negatively affect pregnancy outcomes, infant health, or both.