Which of the Following Is NOT a Reason for the Recent

question 18

Multiple Choice

Which of the following is NOT a reason for the recent decline in the use of stock options in executive pay?

• A)There has been a growing pressure to expense stock options in annual reports.
• B)In a falling market, stock options are underwater-the market price is below the exercise price.
• C)Financial Accounting Standard Number 313 raises the cost of using stock options.
• D)Stock options do not pay for executive performance.

---

Definitions:

Remainderman

A remainderman is the person or entity entitled to receive the remainder of an estate after the termination of the life estate or other interest ends.

CPI-Measured Inflation Hedge

An investment or asset that is expected to increase in value at a rate that matches or exceeds the rate of inflation as measured by the Consumer Price Index (CPI), thus preserving purchasing power.

TIPS

Treasury Inflation-Protected Securities, a type of U.S. Treasury bond designed to help investors protect against inflation.

Fully-Funded Pension Funds

Pension plans that have sufficient assets to meet all the pension obligations to participants, both present and anticipated.