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Which of the Following Statements Related to Employee Stock Options

question 20

Multiple Choice

Which of the following statements related to employee stock options (ESO) are generally correct?
I. ESO vesting encourages long-term employment.
II. Most ESOs are issued at the money.
III. ESOs cannot be resold.
IV. ESOs that are in the money are frequently repriced.

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Definitions:

Put

It refers to an options contract giving the holder the right but not the obligation to sell a specified amount of an underlying security at a predetermined price within a specified time frame.

Underlying Asset

The financial asset that determines the value of a derivative instrument or structured product.

Treasury Bills

Short-term debt securities issued by the government with a maturity of less than one year, used to finance government spending.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specific time frame.

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