Which of the Following Statements Is FALSE

question 25

Multiple Choice

Which of the following statements is FALSE?

• A)Backdating refers to the practice of choosing the grant date of a stock option retroactively,so that the date of the grant would coincide with a date when the stock price was at its low for the quarter or for the year.
• B)Unless it is reported in a timely manner to the IRS and to shareholders,and reflected in the firm's financial statements,backdating is illegal.
• C)The use of backdating suggests that some executive stock option compensation may not truly have been earned as the result of good future performance of the firm.
• D)By backdating the option the executive receives a stock option that is already out-of-the-money,with a strike price equal to the higher price on the supposed grant date.

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Definitions:

Exchange Rate

How much one currency is worth in terms of crossing over to another currency.

Mexican Demand Curve

A graphical representation showing the quantity of goods that consumers in Mexico are willing and able to purchase at various prices.

U.S. Dollars

The official currency of the United States, widely used as a standard of exchange in international markets.

Pesos

The currency unit used in several countries, notably Mexico and Argentina, among others.