二、Crocker Corpor tat ion's net income for 2005 is $600, 000. The only potentially dilutive securities outstanding were ]2,000 options issued during 2004, each exercisable for one share at $70, None has been exercised, and 120, 000 shares of common were outstanding during 2005. The average market price of Crocker' s stock during 2005 was $60. On July 1,2005, Crocker Corporation issued 5-year, $l, 000, 000 face value, 5% bonds, at par. Each $1, 000 bond is convertible inl;o 30 shares of Crocker common stock, if income tax rate is 40% Required:
(l)Are the options artli- dilutive ? Why?