Which One of These Is Not a Reason Why Executives

Multiple Choice

Which one of these is not a reason why executives place less value on employee stock options than their face value would indicate?

A) The option's value depends on the stock price exceeding the exercise price.
B) Options must generally be held for a period of time.
C) Options may create a highly undiversified portfolio for the executive.
D) Options always create taxable income for the executive when granted.
E) Options could be out of the money.