The Following Information Relates to Questions

question 28

Multiple Choice

The following information relates to questions
Viola Ltd has granted each of its 10 senior executives a choice between receiving a cash payment equivalent to 1000 shares or receiving 1200 share. The grant is conditional on the completion of three years’ service with the company. If the share alternative is chosen, the shares must be held for two years after vesting date. At grant date the company’s share price is £25 per share. At the end of years 1, 2 and 3 the share price is £27, £28 and £30 respectively. The company does not expect to pay dividends in the next three years. After taking into account the effect of post-vesting transfer restrictions the company estimates the grant-date fair value of the share alternative is £24 per share.
-What is the fair value of the equity alternative?

• A) £240 000
• B) £250 000
• C) £288 000
• D) £300 000

Apply the Empirical Rule to mound-shaped distributions to determine the percentage of data within one, two, or three standard deviations from the mean.

Use Tchebysheff's Theorem for any shaped distribution to estimate the proportion of observations within a certain number of standard deviations from the mean.

Determine the shape of a distribution based on the relationship between mean, median, and mode.

Apply the concept of skewness to real-life data interpretation.

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Definitions:

Biographical Memory

A type of memory involving the recollection of personal experiences and events in one's life.

Personal Events

Specific occurrences or experiences in an individual's life that have significant personal implications, impact or meaning.

Scripts

General representations in memory of a sequence or series of events.

Autobiographical Memory

The type of memory that involves recollecting personal experiences and events from one’s own life.