Out-of-the-money options can motivate CEOs to engage in __________ behaviors.
A) principled
B) unethical
C) lazy
D) ethical

Question

Quizplus · Accepted Answer

When options are out-of-the-money, it means the CEO has a lower chance of realizing a profit from exercising those options, which can incentivize them to engage in unethical and even illegal behaviors to artificially increase the stock price and make the options more valuable. This behavior can include misrepresenting financial information or engaging in insider trading.

Out-Of-The-Money Options Can Motivate CEOs to Engage in __________ Behaviors