GCC Corporation Is Planning to Issue Options to Its Key

question 19

Multiple Choice

GCC Corporation is planning to issue options to its key employees,and it is now discussing the terms to be set on those options.Which circumstance would decrease the value of the options,other things held constant?

• A)GCC's stock price becomes more risky (higher variance).
• B)The exercise price of the option is increased.
• C)The life of the option is increased, i.e., the time until it expires is lengthened.
• D)The government takes actions that increase the risk-free rate.

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Definitions:

Dry

Lacking moisture, not wet or lubricated; often relating to conditions, substances, or operation modes.

Silicone Lube

A lubricant made from silicone, offering excellent moisture resistance and a wide temperature range compatibility, used in various applications.

Leaking Oil

The unintentional escape of oil from a system or container, usually due to a breach in containment like a seal or gasket failure.

Front And Rear Seals

Components in an engine or transmission that prevent oil or fluid leakage at either end.