Which of the Following Statements Is Correct Regarding Stock Option

question 42

Multiple Choice

Which of the following statements is correct regarding stock option plans?

• A) They are offered only to top-level executives and members of the board of directors.
• B) If the stock price increases, employees are likely to exercise their option to purchase the stock.
• C) The company holds the stock for the benefit of the employees.
• D) Stock options are provided as a retirement benefit.

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Definitions:

Investment Goods

Physical goods acquired to create value over time by being used in the production of other goods or services.

Base Year

A specific year against which economic growth, inflation, and other economic indicators are measured to assess changes over time.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate reflection of an economy's size and growth by measuring the value of goods and services produced.

Real GDP

Gross Domestic Product after adjustments for inflation; measures the value of all goods and services produced within a country's borders in a specific time period using constant prices.