Which of the Following Statements Is FALSE

question 10

Multiple Choice

Which of the following statements is FALSE?

• A)An American call on a non-dividend-paying stock has the same price as its European counterpart.
• B)The price of any call option on a non-dividend-paying stock always exceeds its intrinsic value.
• C)It is never optimal to exercise a call option on a dividend-paying stock early-you are always better off just selling the option.
• D)If the present value of the dividend payment is large enough,the time value of a European call option can be negative,implying that its price could be less than its intrinsic value.

---

Definitions:

Milgram's Experiment

Stanley Milgram's social psychology experiments assessed how likely individuals were to follow orders from an authoritative figure, even when these orders went against their own moral beliefs.

Shock Series

A sequence of stressful or traumatic events experienced by an individual or a group, potentially leading to psychological impact.

Milgram Experiment

Experiments in social psychology led by Stanley Milgram investigated the extent to which individuals would comply with the instructions of an authority figure, despite these instructions contradicting their ethical principles.

Confederate

An individual who is part of an experiment and aware of its purpose but pretends to be a participant to manipulate situations as per the experimenter's design.