Contracts covering 3 or 4 seasons may be extended when?

The option stating that contracts covering 3 or 4 seasons may be extended on the second "season" anniversary of being signed is correct because, under the NBA Collective Bargaining Agreement (CBA), teams and players have specific times when contract extensions can take place. Specifically, extensions for multi-year contracts can only occur after the second anniversary of the contract. This means that a player and their team cannot negotiate an extension until at least two seasons have passed since the start of the contract, ensuring that both parties have had sufficient time to assess the player's performance, market conditions, and other relevant factors before deciding to extend the contract.

The other options do not align with the CBA’s stipulations regarding contract extensions. For instance, while a team could agree to an extension, the negotiation window for when these extensions can be initiated is specifically limited to the second anniversary, not just whenever the team agrees. Similarly, a player cannot initiate an extension merely at their discretion or after the first anniversary, as the rule is distinctly tied to the passage of time related to the contract's inception.