Question

In 2003, a company employee received an option to purchase the company's stock at $45 per share. If the stock is trading at $40 a share in 2005, the employee will most likely:

A. exercise the option, receiving a gain of $5.

B. exercise the option, receiving a gain of $40.

C. would not bother to exercise the options.

D. be eligible to obtain a price $45 per share.

E. sell the shares to a third party slightly above the market price.

Answer

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