Recently, a few companies have been accused of issuing stock options to their top executives at the lowest stock price of the year. Executives can later sell these stock shares at a higher price and make a large profit. In some companies, this happened several years in a row. An executive argued, "It's just a coincidence. There are about 250 trading days in a year, so there is a reasonable chance that my option price just happened to be lowest of the year." Discuss.

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The Answer of Recently, a few companies have been accused of issuing stock options to their top executives at the lowest stock price of the year. Executives can later sell these stock shares at a higher price and make a large profit. In some companies, this happened several years in a row. An executive argued, "It's just a coincidence. There are about 250 trading days in a year, so there is a reasonable chance that my option price just happened to be lowest of the year." Discuss.

Recently, a Few Companies Have Been Accused of Issuing Stock