A Stock Option Plan Is a Motivational Device in Which

question 27

True/False

A stock option plan is a motivational device in which the corporation grants employees the right to acquire a specified personalized number of shares of the corporation at a predetermined invariant price and for a specified time window.

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Definitions:

Clearinghouse

An intermediary agency that facilitates the clearing and settling of financial transactions, often associated with exchanges and securities.

Profit

The earnings resulting when business activity revenues exceed the necessary expenses, costs, and taxes to maintain the activity.

Long Oil Futures Contract

An agreement to buy oil at a specified price on a specified future date, bet taken with the expectation that oil prices will rise.

Close Position

The act of selling or buying securities to offset an existing position, thereby ending the investor's exposure to that investment.