Which of the Following Statements Is Incorrect

question 11

Multiple Choice

Which of the following statements is incorrect?

• A) Some firms allowed their CEOs to backdate options that they were granted to an earlier period when the stock price was lower.
• B) Backdating is completely inconsistent with the idea of granting options to encourage managers to focus on maximizing the stock price.
• C) Firms readily promote their option compensation programs and are more than willing to acknowledge that the options are an expense.
• D) All of the above are correct.

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Definitions:

Beneficial Supply Shock

A situation in which supply increases unexpectedly, leading to lower prices and potentially higher consumer satisfaction without causing negative economic effects.

Natural Resources

Elements found in the natural environment such as minerals, forests, water, and fertile soil, which can be harnessed for economic profits.

Long-Run Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level and the total output a economy can produce when all resources are fully employed, assuming no changes in technology or resource availability.

Technological Breakthrough

Sudden, significant progress or innovation in technology that dramatically changes industries or societies.