Which Two of the Following Are the Key Reasons Why

question 40

Multiple Choice

Which two of the following are the key reasons why most major corporations issue employee stock options?
I. provide an employee benefit in place of a retirement plan
II. no immediate cost to the corporation
III. align management and shareholder interests
IV. replace employer-provided insurance benefits

• A)I and II only
• B)I and III only
• C)II and III only
• D)II and IV only
• E)III and IV only

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Definitions:

Government Regulation

Government regulation encompasses the laws and rules set forth by the government intended to control or manage certain practices, activities, or behaviors within an economy or society.

Entry Barriers

These are obstacles that prevent or hinder new competitors from easily entering an industry or area of business.

Government Failure

Situations where government interventions in the economy cause more inefficiency and problems than they solve.

Competitive Markets

Markets in which there are many buyers and sellers so that each has a negligible impact on the market price.