Stock options:
A) provide the holder with the option to purchase stock at a specified price during a specified period of time.
B) are stock dividends in which additional shares equal to more than 20 to 25%.
C) of the shares outstanding are issued.
D) are a corporation's option to issue both preferred and common stock.

Question

Quizplus · Accepted Answer

Stock options are contracts that give the holder the right, but not the obligation, to buy or sell a specific stock at a predetermined price within a set time frame. Therefore, choice A is the correct answer, as it accurately describes what stock options are. Choices B, C, and D do not provide an accurate description of stock options.

Stock Options