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

question 13

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.

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Definitions:

Repression

A defense mechanism where stressful thoughts or memories are unconsciously pushed out of conscious awareness.

Freud's Concept

Theoretical ideas proposed by Sigmund Freud, focusing on the unconscious mind, the importance of childhood, and the structure of personality into ego, id, and superego.

Humanistic Perspective

A psychological approach that emphasizes personal growth, self-acceptance, and the concept of self-actualization.

Self-determination

The process by which a person controls their own life.