Which of the Following Is/are True Concerning an Employee Stock

question 66

Multiple Choice

Which of the following is/are true concerning an employee stock options' time value element?

• A)One cannot measure the amount of the element before the expiration date.
• B)Stock options with exercise prices less than the current market price of the stock have a higher value, other things equal, than stock options with exercise prices exceeding the current market price of the stock.
• C)Stock options that are "in the money" have a higher value, other things equal, than stock options that are "out of the money".
• D)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 .
• E)none of the above

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Definitions:

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