Question: Managerial compensation packages often include stock options with the goal of aligning managers incentives with those of the shareholders. These call options give the manager

Managerial compensation packages often include stock options with the goal of aligning managers incentives with those of the shareholders. These call options give the manager the right, but not the obligation to purchase shares at the strike price on or before a certain maturity date. Discuss two different possible complications that might arise with certain options (think about options maturity and the moneyness of the option).

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