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Which of the Following Is/are True Concerning an Employee Stock

Question 169

Multiple Choice

Which of the following is/are true concerning an employee stock options' time value element?


A) One cannot measure the amount of the element before the expiration date.
B) Stock options with exercise prices less than the current market price of the stock have a higher value, other things equal, than stock options with exercise prices exceeding the current market price of the stock.
C) Stock options that are "in the money" have a higher value, other things equal, than stock options that are "out of the money".
D) A stock option whose exercise price exceeds the current market price has economic value because of the possibility that the market price will exceed the exercise price on the exercise date .
E) none of the above

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