What Happens to an Option If the Underlying Stock Has

Multiple Choice

What happens to an option if the underlying stock has a 2-for-1 split?

A) There is no change in either the exercise price or in the number of options held.
B) The exercise price will adjust through normal market movements; the number of options will remain the same.
C) The exercise price would become one-half of what it was, and the number of options held would double.
D) The exercise price would double, and the number of options held would double.
E) There is no standard rule-each corporation has its own policy.