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The Ultimate Stock Options Quiz
by Staff
Stock options are a popular employee benefit, and have made millions for some lucky workers. Understanding what stock options can do for you or what this compensation benefit can do for your company may help you make better employment decisions. Take this quiz to see how much you know about stock options.

Why would a stock option be mentioned in a job advertisement?

  • benefit
  • job description
  • necessary skill

What is a stock option?

  • A stock option is an opportunity to buy a set amount of stock for a certain price at any time.
  • A stock option is an opportunity to buy stock at a certain time.
  • A stock option is an opportunity to buy a set amount of stock at a certain price and time period.

Why would an employee want stock options?

  • opportunity for future cash benefit
  • non-taxed income
  • cafeteria benefit

What is a strike price?

  • public offering price
  • stock option price
  • daily closing price

How long do you hold a stock option?

  • one year
  • 10 years
  • set by the employer

What is a vesting period?

  • employment period
  • time period before exercising an option
  • period after exercising an option

What happens if you leave a company before all of your options have vested?

  • The options may be exercised regardless of your employment status.
  • If you worked for more than half of the vesting period, the options may be exercised.
  • The options will be lost.

If you have the offer of a higher salary or stock options from a company with an uncertain future, what is the best choice?

  • salary
  • option
  • look at the job listings

Who offers stock options?

  • privately held companies
  • publicly held companies
  • both answers

Who is offered stock options?

  • company executives
  • non-executive employees
  • both answers

Why would a start-up company offer stock options?

  • to conserve cash
  • too much stock
  • tax savings

What must happen for stock options to be profitable?

  • trade below strike price
  • trade at strike price
  • trade above strike price

What is the grant price?

  • strike price
  • spare price
  • foul price

How do employees cash out their stock options?

  • immediately
  • after a waiting period
  • after a vesting period

May the employee hold onto the stocks converted from the options?

  • The employee is not required to immediately sell the stock.
  • The employee may sell some stock and hold the rest.
  • Both answers are correct.

Do stock options guarantee a profit for the employee?

  • usually guarantee a profit
  • always guarantee a profit
  • no profit guaranteed

How do stock options allow an employee to share in a company's growth?

  • stock option values increase
  • employees get raises
  • stock option values decrease

Does an employee have to exercise an option?

  • must exercise
  • may exercise some
  • let option expire

How does a privately held company determine a strike price?

  • the board of directors vote
  • an outside appraiser decides
  • the employee decides

How are vesting periods spread out?

  • over several days
  • over several months
  • over several years