The Employment Contracts for Professional Athletes Often Contain Options for Either

question 79

Multiple Choice

The employment contracts for professional athletes often contain options for either the player or the team. Consider one recent contract in Major League Baseball. The player's salary was guaranteed for the first couple years. However, after several years, the team had the option to cancel the contract if the player became injured. If we think of each player as a project for the team, this option feature of the contract is best described as

• A) the option to defer investment.
• B) the option to make follow-on investments.
• C) the option to change operations.
• D) the option to abandon projects.

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Definitions:

Private Equity Funds

Investment vehicles that collect capital from wealthy individuals or institutions to invest in or acquire private companies.

Venture Capital Funds

Financial funds that invest in startups and small businesses with high growth potential in exchange for equity.

Start-up Companies

New business ventures that are in the initial phase of operations and typically characterized by innovative products or services and high growth potential.

Short-term Bank Loans

Loans offered by banks to be repaid within a short timeframe, typically less than a year, to meet immediate financial needs.