Which of the Following Statements Is FALSE

question 37

Multiple Choice

Which of the following statements is FALSE?

• A)Because an American option cannot be worth less than its intrinsic value,it cannot have a negative time value.
• B)An American option with a later exercise date cannot be worth less than an otherwise identical American option with an earlier exercise date.
• C)The value of an option generally decreases with the volatility of the stock.
• D)The intrinsic value is the amount by which the option is currently in-the-money or 0 if the option is out-of-the-money.

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Definitions:

Aggressive Instincts

Refers to innate or developed tendencies toward hostility or assertiveness in behavior and thought.

Psychoanalysis

A theory and treatment approach founded by Sigmund Freud, focusing on unconscious processes and childhood experiences as key influences on behavior and mental health.

Psychoanalytic Perspective

A theoretical approach in psychology that emphasizes unconscious processes and past experiences, particularly childhood experiences, in shaping behavior and personality.

Defense Mechanisms

Psychological strategies employed unconsciously to protect oneself from anxiety or to face reality, including denial, repression, and projection.