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:

James-Lange Theory

A theory of emotion that suggests emotions occur as a result of physiological reactions to events, proposing that physical reactions lead to emotional experiences.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions, such as heartbeat, digestion, and breathing.

Autonomic Activity

Involuntary physiological functions controlled by the autonomic nervous system, including heart rate, digestion, respiratory rate, pupillary response, urination, and sexual arousal.

James-Lange Theory

A theory of emotion that suggests emotions occur as a result of physiological reactions to events.