Which of the Following Statements Is CORRECT

question 9

Multiple Choice

Which of the following statements is CORRECT?

• A) An option's value is determined by its exercise value,which is the market price of the stock less its strike price.Thus,an option can't sell for more than its exercise value.
• B) As a stock's price increases,the premium portion of an option on that stock increases because the difference between the stock price and the fixed strike price increases.
• C) If the company is consistently profitable,its call options will always be in the money.
• D) The market value of an option depends in part on the option's length of time until expiration and on the variability of the underlying stock's price.
• E) The potential loss on an option decreases as the option sells at higher and higher prices because the profit margin becomes larger.

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Definitions:

Corporate

Pertaining to corporations, typically referring to business entities or their activities, culture, and structures.

Diversity

Refers to the inclusion of different types of people (such as people of different races, cultures, genders, etc.) in a group or organization.

Individual Pictures

Photographs or images that focus on a single subject or entity to capture its essence or details.

High Context

Communication style in which much of the message is conveyed through the context or non-verbal cues rather than explicit words.