Corporations by Rewarding Executives with Large Option Positions

question 9

Multiple Choice

Corporations by rewarding executives with large option positions:

• A) cause the executives to hold highly undiversified portfolios.
• B) put the firm in a risky position to pay off the options.
• C) cause the value of the stock to fall because the options are theft.
• D) are really valueless because most options are never exercised.

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Definitions:

Pupil

The circular opening in the center of the iris of the eye, which regulates the amount of light that enters.

Lens

A transparent optical component that focuses or disperses light rays, used in a variety of devices such as glasses, cameras, and microscopes to enhance vision or capture images.

Opponent-Process Cell

A type of cell in the visual system that is believed to be responsible for processing colors by encoding differences between pairs of colors such as red-green or blue-yellow.

Thalamus

A large, dual-lobed mass of grey matter buried under the cerebral cortex, involved in relaying sensory information and acting as a center for pain perception.