An Option's Value Will Never Be Less Than Zero Because

question 117

Multiple Choice

An option's value will never be less than zero because:

• A) the intrinsic value is always less than zero.
• B) the option seller is required to make up any shortfall faced by the option buyer.
• C) an option holder will never make an additional payment to exercise the option.
• D) the time value of the option is always less than zero.