BLW Corporation Is Considering the Terms to Be Set on the Options

question 16

Multiple Choice

BLW Corporation is considering the terms to be set on the options it plans to issue to its executives.Which of the following actions would decrease the value of the options, other things held constant?

• A) The exercise price of the option is increased.
• B) The life of the option is increased, i.e., the time until it expires is lengthened.
• C) The Federal Reserve takes actions that increase the risk-free rate.
• D) BLW's stock price becomes more risky (higher variance).
• E) BLW's stock price suddenly increases.

---

Definitions:

Somatosensory Cortex

The area in the brain tasked with analyzing sensory data from the body, such as sensations of touch, heat, and discomfort.

Somatosensory Homunculus

A visual representation of the body within the brain, illustrating the proportion of sensory nerves dedicated to different parts of the body.

Sensory Input

Information received by the senses (sight, sound, smell, taste, and touch) that is then sent to the brain for processing.

Primary Motor Cortex

A section of the cerebral cortex tasked with the planning, control, and initiation of voluntary movements.