Which of the Following Strategies Makes No Sense

question 12

Multiple Choice

Which of the following strategies makes no sense?

• A) An employee exercises stock options early and sells the stock. No dividends are expected
• B) An employee exercises stock options early and keeps the stock. No dividends are expected
• C) An employee exercises stock options early and sells the stock. Dividends are expected
• D) An employee exercises stock options early and keeps the stock. Dividends are expected.

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Definitions:

Opportunity Cost

The worth of the most favorable option given up when a choice is made.

Taco

A traditional Mexican dish consisting of a small hand-sized tortilla topped with a filling.

Burrito

A Mexican-inspired dish consisting of a large wheat flour tortilla wrapped or folded around a filling that typically includes meat, beans, rice, cheese, and vegetables.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choosing one option over another.