Which of the Following Is a Disadvantage Associated with Stock

question 106

Multiple Choice

Which of the following is a disadvantage associated with stock options?

• A) They may increase risk taking.
• B) They motivate executives to act like owners.
• C) They align incentives with shareholder interests.
• D) They encourage executives to create stock value.

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Definitions:

Market Economy

A system where the prices of goods and services are determined by supply and demand, rather than by government intervention.

Employment Discrimination

Unfair treatment of employees based on race, gender, age, religion, nationality, disability, or sexual orientation rather than job performance or qualifications.

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible, typically characterized by the absence of involuntary unemployment.

Full Production

A state of economic production in which all available resources (labor, capital, etc.) are being used efficiently, leading to the maximum possible output.