fluffydoglove4036 fluffydoglove4036

11-12-2019
Social Studies

contestada

A ________ is a right to buy shares in a company at a fixed price, called the exercise price. This price must be fixed in advance. Apple mistakenly and illegally lowered the exercise price to make the benefit more valuable after the stock price fell.

Respuesta :

andriansp andriansp

18-12-2019

Answer:

stock option

Explanation:

Stock option make it possible for individuals to purchase a stock at an agreed upon price, even if the price of the stock fall or rise in the future. Usually, this option is purchased by the people who are certain about the future of a company.

For example,

Let's say that a company announced the release of a new product in the future. Since you believe that the product will be successful, you can purchase stock option and purchase the stock while the price is low.

When the product is released and actually successful, the price of the stock will most likely increased and you can benefit right away from your stock options since you purchased the stock while it's still cheap.

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