Which of the Following Is TRUE of the Reserve Clause

question 19

Multiple Choice

Which of the following is TRUE of the reserve clause?

• A) While the reserve clause existed at the onset of professional sports leagues, it no longer exists in any form today.
• B) The reserve clause allows players the opportunity to negotiate with other teams for higher pay and other incentives.
• C) In North America, players must play a specified number of seasons according to the reserve clause and then qualify for free agency.
• D) The reserve clause has been, and is, promoted by players' associations as most beneficial for professional athletes.

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Definitions:

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company's profits or losses.

Retained Earnings

The segment of net profit held back by the business rather than being shared with its proprietors in the form of dividends.

Deferred Revenue

Income that has been received by a company for goods or services not yet delivered or performed, recognized as a liability on the balance sheet.

Common Stock

Represents ownership in a corporation, granting holders voting rights and a share in the company's profits through dividends.