Which One of the Following Statements Is True

question 97

Multiple Choice

Which one of the following statements is true?

• A)A call with a strike price of $25 and a stock price of $23 has positive intrinsic value.
• B)A European style option is more valuable than an American style option.
• C)An American style out-of-the-money call option can have a positive value.
• D)A $40 put option has more intrinsic value than a $50 put option on the same underlying asset.
• E)The time value of an option is equal to the intrinsic value minus the option premium.

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Definitions:

Carbon

A chemical element with the symbol C, essential to all known life, capable of forming a vast number of compounds including CO2 and organic materials.

Peatbogs

A type of wetland ecosystem characterized by the accumulation of acidic peat, a deposit of dead plant material, often moss.

Arctic

A polar region located at the northernmost part of Earth, characterized by extreme cold, ice-covered seas, and unique ecosystems adapted to cold environments.

Soils

The top layer of the earth's surface, composed of mineral particles, organic matter, water, and air, and capable of supporting plant life.