In the Context of Stock Ownership,what Is Meant by "Backdating

question 120

Multiple Choice

In the context of stock ownership,what is meant by "backdating" a stock option?

• A) reaping windfall in the stock market by selling stock based on company's nonpublic information
• B) falsifying numbers in the company's annual report to hide losses and inflate the stock prices
• C) buying a company's stock just before the date of key product launch
• D) changing the date or price in an option agreement so that the option holder can buy stock at a bargain price
• E) hiding losses and inflating the recorded value of revenues to boost the price of the company's stock

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Definitions:

Expected Revenue

Refers to the forecasted amount of money a business expects to receive from sales over a certain period.

Sealed-Bid

A bidding process where all bidders submit their bids simultaneously in sealed envelopes, without knowing the bid amounts of other participants.

Lemons

In economics, refers to products of lower quality that cannot be distinguished from higher quality products before purchase, derived from the market for used cars analyzed by George Akerlof.

Expected Value

A statistic that measures the mean, or average, outcome of a set of probabilities or a random variable.