The most compelling advantage of stock options is the potential rewards to participants when:
A) the stock splits
B) the stock price increases
C) the stock price more than triples
D) the stock is placed in a trust fund
E) the stock price decreases

Question

Quizplus · Accepted Answer

Stock options provide participants with the potential for financial gain when the stock price increases. As the stock price goes up, the value of the option increases, allowing the participant to purchase the stock at a lower price and sell it at a higher price, realizing a profit. The potential for reward is greatest when the stock price experiences a significant increase.

The Most Compelling Advantage of Stock Options Is the Potential