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:

Annual Reports

are comprehensive reports issued by a company at the end of each fiscal year, detailing its operations and financial conditions.

Publicity

Disseminating unpaid news items through some form of media (e.g., television story, newspaper article, etc.) to gain attention or support.

Narrowcasting

The dissemination of information to a fairly small, select audience that is defined by its shared values, preferences, or demographic attributes.

Major Television Networks

Large national or international broadcasting organizations that distribute television content across a wide geographic area.