n NISM Certifications
X NISM Series X
Medium

In an Employee Stock Option Plan (ESOP), when is the benefit typically realized?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. On the vesting date

    Correct answer

  2. B

    When the employee dies

  3. C

    Upon termination of employment

  4. D

    Upon retirement

Why this is the answer

The vesting date is when the employee gains the right to exercise the stock options, enabling them to purchase shares at a predetermined price, which is when the benefit materializes.

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