The Value of a Stock Option Is Dependent Upon the Value

question 17

Multiple Choice

The value of a stock option is dependent upon the value of the underlying stock. Thus, a stock option is a:

• A) forward agreement.
• B) derivative security.
• C) mezzanine asset.
• D) contingent security.
• E) junior security.

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Definitions:

Lex Mercatoria

A set of legal principles that govern international commercial law and practices, often used to resolve disputes in international commercial arbitration.

Treaty

A formally concluded and ratified agreement between sovereign states or international organizations.

International Contract

An international contract is a legally binding agreement between parties from different countries, often involving complex considerations of multiple legal jurisdictions.

Forum

A place, meeting, or medium where ideas and views on a particular issue can be exchanged.