Which One of the Following Statements Is Correct

question 1

Multiple Choice

Which one of the following statements is correct?

• A)The market reaction to employee stock option plans (ESOPs)is typically negative, suggesting that employee stock ownership destroys firm value.
• B)ESOPs also generate tax benefits and this makes it more difficult to assess the benefits arising from employee stock ownership.
• C)Studies on the market reaction to ESOPs find either positive or insignificant abnormal returns.
• D)Statements B and C are correct.

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Definitions:

Falsifiability

The principle that a good scientific idea or theory should be capable of being shown to be false when tested using scientific methods.

Empiricism

Use of objective observations to answer a question about the nature of behavior.

Empirical Evidence

Evidence that is based on observation, experience, or experiment, rather than theory or pure logic.

Intuition

The ability to understand or know something immediately, without the need for conscious reasoning.