Since the early days of option pricing theory,the assumption that the dividends on the underlying stock or index over the life of the contract are known has not been challenged. We examine the sensitivity of index option prices to the assumption of dividend uncertainty. We consider a number of...

Executive equity swaps have significant benefits for corporate insiders who wish to enhance their current income and maintain voting rights while reducing exposure to equity holdings in their firms. Since swaps do not require the sale of shares, capital gains taxes are delayed. Swaps, however,...