What Is the Difference Between Stock Options and Employee Stock

question 18

Multiple Choice

What is the difference between stock options and employee stock ownership plan (ESOP) ?

• A) Stock options carry significant risk whereas ESOPs are risk-free.
• B) Stock options are usually used with top management whereas ESOPs are provided to all employees.
• C) In stock options, stocks are placed into a trust whereas ESOPs give employees the right to buy a certain number of shares of stock.
• D) Under stock options, employees can sell their stocks whereas ESOPs do not allow employees to sell their stocks.
• E) Earnings from stock options are exempt from income taxes whereas earnings from ESOPs are taxable.

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Definitions:

Major Product

The product formed in the greatest amount in a chemical reaction, determined by the mechanism and conditions of the reaction.

Likely Products

Refers to the expected substances that result from a chemical reaction, based on the reactants and conditions.

Predominate Product

The main or most abundant product formed in a chemical reaction under the given set of conditions.

Major Product

The product that is formed in the greatest amount in a chemical reaction.