Executive compensation often comprises stock options. These options have vesting periods, and may not be exercised for a while. Which of the following actions might an executive take to help her mitigate the risk of her stock option grants?
A) Enter into an equity swap where she receives the company's share price returns in exchange for paying Libor.
B) Short futures on a broad market index.
C) Short her own company's stock.
D) Buy put options on her own stock.

Question

Executive compensation often comprises stock options. These options have vesting periods, and may not be exercised for a while. Which of the following actions might an executive take to help her mitigate the risk of her stock option grants? 
A) Enter into an equity swap where she receives the company's share price returns in exchange for paying Libor.
B) Short futures on a broad market index.
C) Short her own company's stock.
D) Buy put options on her own stock.

Quizplus · Accepted Answer

The Answer of Executive compensation often comprises stock options. These options have vesting periods, and may not be exercised for a while. Which of the following actions might an executive take to help her mitigate the risk of her stock option grants? 
A) Enter into an equity swap where she receives the company's share price returns in exchange for paying Libor.
B) Short futures on a broad market index.
C) Short her own company's stock.
D) Buy put options on her own stock.

Executive Compensation Often Comprises Stock Options