The exercise price and market price of stock under a fixed compensatory stock option plan are equal on the grant date. The fair value of the options is greater than the option price . Under the fair value method Compensation expense will be recognized in connection with the option plan No compensation expense will be recognized in connection with the option plan Deferred compensation will be recognized No paid-in capital from stock options will be recognized

Q: A put option gives the holder the right to sell a stock or other financial securities at a specified…

A: Derivative instruments are financial contracts that derive their value from an underlying asset such…

Q: The majority of the time, once a put option is purchased it is either sold for a gain or expires…

A: Options are derivative instruments in which the buyer of the option has the right or obligation to…

Q: Question E denotes the strike or exercise price below. For an American call option, A and B in the…

A: The intrinsic value of the option refers to the difference between the current market price and the…

Q: onvertible bond B. none of these c .non convertible bond + call option d .non convertible…

A: Step 1 Convertible bondholders receive newly issued securities in the form of shares when they…

Q: Prepare Trading and Profit and Loss A/C for the year ending 31* March 2020 and a Balance Sheet as on…

A: Trading Account is a financial statement that shows the result of buying and selling goods and…

Q: Which of the following activities or transactions would most likely face right-way risk of…

A: A derivative does not have its own value, it has got derived value from the underlying assets.…

Q: The seller of a put option is not necessarily the seller of the underlying asset. True False

A: The options can be sold even though the underlying assets are not held by the option sellers.

Q: The buyer of a Put Option has the right but not the obligation to sell the underlying stock. True…

A: A put option is a derivative contract giving the purchaser/owner the right, but not the obligation,…

Q: In the context of options, what is the "premium"? A) The cost of entering into the option contract…

A: Call and put options are financial derivatives that provide the holder the right, but not the…

Q: Explain how electing the fair value option and how impairment recognition affectaccounting for…

A: Definition: Impairment: It is a situation that arises when the carrying value of the investment…

Q: The Options Clearing Corporation is responsible for all of the following EXCEPT: A…

A: Options Clearing Corporation is an issuer and guarantor of the listed option (derivatives)…

Q: If instead of an unguaranteed residual value, there is a purchase option which is so low that it is…

A: As per IAS 17 "Leases " , if the lessee has an option to purchase the asset at a price which is…

Q: Net proceeds received from a put option if exercised equals strike price ______ premium and Net…

A: Put option is the option which provides the buyer the right to sell the underlying asset. Call…

Q: A "cash and carry" transaction

A: Arbitrage is the strategy utilized by the investors, in which they make benefit of the asset…

Q: (Based on Appendix A) The fair value of stock options can be considered to comprise two main…

A:

Q: True or False

A: The objective of the question is to determine whether a European call option with a longer…

Q: 6. Which one of the following statements is incorrect regarding the margining of exchange-trade…

A: The future contract is a type of exchange traded contract which is standardised in nature and which…

Q: For a call option, the: *       A. buyer is locked into receive the underlying asset at a specified…

A: Call option is a type of contract in which buyer has right or option to purchase specified asset or…

Q: [The following information applies to the questions displayed below.] Similarly, we estimate the…

A: Stock option means where the shares are issued to company employee or executives at less than the…

Q: Compensation expense must be adjusted during the service period to reflect changes in the fair value…

A: Compensation costs are the costs that an employer must repay to an employee as a benefit when the…

Q: Which of the following describes a short put option? The obligation to sell an asset for a certain…

A: The put option give the right to the holder to sell the Asset by certain by certain date certain…

Q: Select all that are true with respect to option valuation: Group of answer choices   The holder of a…

A: Option valuation refers to the process of determining the fair value of an options contract. This is…

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.