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A stock option is an example of a long-term incentive. A stock option gives an investor the right to purchase or sell stocks at a set price within a specific timeframe.

In finance, a choice is an agreement that conveys to its proprietor, the holder, the right, however not the obligation, to shop for or sell a specific quantity of an underlying asset or instrument at a unique strike price on or before a unique date, relying at the fashion of the choice. options are normally acquired via purchase, as a shape of compensation, or as part of a complex monetary transaction. consequently, they're additionally a form of asset and feature a valuation that may depend on a complicated dating among underlying asset charge, time till expiration, marketplace volatility, the chance-unfastened rate of interest, and the strike rate of the option. alternatives can be traded between non-public parties in over-the-counter (OTC) transactions, or they will be trade-traded in live, public markets in the shape of standardized contracts.

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