Which of the Following Is/are Not True Concerning an Employee

question 18

Multiple Choice

Which of the following is/are not true concerning an employee stock options' time value element?

• A)The time value element results from the possibility of increases in the market price of the stock during the exercise period.
• B)Time value is larger the longer the exercise period and the more volatile the market price of the stock.
• C)A stock option whose exercise price exceeds the current market price has economic value because of the possibility that the market price will exceed the exercise price on the exercise date.
• D)A stock option whose exercise price has zero intrinsic value has economic value because of the possibility that on the exercise date there would be positive intrinsic value.
• E)Stock options with exercise prices exceeding the current market price of the stock have a higher value, other things equal, than stock options with exercise prices less than the current market price of the stock.

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Definitions:

Placebo Pill

An inert substance given to a participant in a study, which has no therapeutic effect and is used to control for the placebo effect in experiments.

Unconscious Attributions

Psychological processes that influence one's behavior and thoughts without their aware realization.

Binocular Rivalry

A visual phenomenon occurring when each eye is presented with different images, leading the brain to alternate between perceptions rather than merging the two images into one coherent view.

Dominant Eye

The eye that provides a slightly greater degree of input to the visual cortex and is preferred over the other for detailed activities.