As a new graduate,you've taken a management management position with Exotic Cuisines, Inc. a restaurant chain that went public last year. the company's restaurant specialize in exotic main dishes, using ingredients such as alligator, buffalo ,and ostrich. A concern you had going in was that the restaurant business is very risky. However, after some due diligence , you discovered a common misperception about the restaurant industry. It is a risky within three years; however recent evidence suggests the failure rate is close to 60 percent over three years. So , it is a risky business, although not as risky as you originally thought. during your interview process , one of the benefits mentioned was employee stock options. upon signing your employment contract, you received options with a strike price of $60 for 10000shares of company stock.As is fairly common , your stock options have a 3-year vesting period and a 10-year expiration , meaning that you can not exercise the options for a period of 3years, and you lose them if you have leave before they vest . After the 3-year vesting period, you can exercise the options at any time. Thus the employee stock options are European (and subject to forfeit)for the first three years anf American afterward. Of course , you cannot sell the options, nor can you enter into any sort of hedging agreement . if you leave the company after the options vest, you must exercise within 90days or forfeit. Exotic Cuisines stock is currently trading at $32.47per share,a slight increase from the initial offering price last year. There are no market-traded options on the company's stock. Because the company has been traded for only about a year, you are reluctant to use the historical returns estimate the standard deviation of the stock's return.However you have estimated that the average annual standard deviation for restaurant company stock is about 55percent . because Exotic Cuisines is a newer restaurant chain, you decide to use a 60percent standard deviation in your calculations . the company is relatively young, and you expect that all earnings will be reinvested into the company for the near future. therefore, you expect to dividends will be paid for at least the next 10years .A 3-year treasury note currently has a yield of 2.4percent ,and a 10-year treasury note has a yield of 3.1percent.

Question surpride that , in tree years ,the company's stock is trading at $60 .at that time ,should you keep the options or exercise them immediately ? what are some important determinants in making such a decision?( I don't know what's mean the question, how to solve it in detail?)