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.

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Definitions:

Reacting

The process of responding or adjusting to stimuli, events, or actions, often implying a spontaneous or immediate response without prior planning.

Crisis Phase

A critical period during which decisive action is required to manage and resolve a threatening situation to an organization or society.

Normal Operations

The standard, day-to-day activities required to keep a business or organization functioning effectively.

Social Media

Platforms that facilitate the creation and sharing of information, ideas, personal messages, and other content virtually among users.