The Value of the Options Awarded Executives Is Much Less

question 11

Multiple Choice

The value of the options awarded executives is much less than face value to the executives because:

• A)the value to the executive depends on the stock price being greater than the exercise price.
• B)the options must be held beyond the freeze-out period.
• C)a highly undiversified portfolio can have a large drop in value with high variance stocks.
• D)All of the above.
• E)None of the above.

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Definitions:

Inconsistent Results

Outcomes that do not follow a regular pattern or expectation, often varying significantly from one instance to another.

Attribution Theory

A framework used to explain how individuals infer the causes of behavior, whether their own or others', based on perceived motivations and outcomes.

Cognitive Processes

Mental activities involved in acquiring, processing, and storing knowledge.

LMX

Stands for Leader-Member Exchange, a theory that focuses on the two-way (dyadic) relationship between leaders and subordinates, highlighting the importance of the quality of these relationships.