Because of Arbitrage, an Option Should Not Sell for Less

question 23

True/False

Because of arbitrage, an option should not sell for less than its intrinsic value.

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Definitions:

World Economy

The global network of economic activities, trade, and production that transcends national borders, involving various economies of the world.

Private Sector

The part of the economy that is run by individuals and companies for profit and is not state controlled.

Resource Suppliers

Entities or individuals that provide the necessary inputs (like labor, raw materials, and capital) for the production of goods and services.

Income Tax

A tax levied by governments on individuals or entities based on their income or profits.