Which of the Below Statements Is FALSE

question 34

Multiple Choice

Which of the below statements is FALSE?

• A) The S&P 500 Index Option contract is European and the underlying is the S&P 500.
• B) There are stock index options for components of the major broad-based stock market indexes, selected industries, and selected sectors.
• C) There are stock index options based on the exercise style but not based on the length of the expiration period.
• D) Stock index options are cash settlement contracts, which means that, if the option is exercised, the exchange-assigned option writer pays cash to the option buyer.

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Definitions:

Trading Security

A financial instrument that is bought and sold for the purpose of generating profits on short-term fluctuations in price.

Available-for-sale Security

A debt or equity security not classified as a held-to-maturity or trading security, which can be sold in the short term for capital gains.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities.