Which of the Below Statements Is FALSE

question 36

Multiple Choice

Which of the below statements is FALSE?

• A) An option is a contract in which the writer of the option grants the buyer the right, but not the obligation, to purchase from or sell to the writer something at the exercise (or strike) price within a specified period of time (until the expiration date).
• B) The price paid by the option buyer is called the option price or option premium.
• C) A call option grants the option buyer the right to buy something from the option writer, and a put option grants the option buyer the right to sell something to the option writer.
• D) None of these

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Definitions:

Dissident Group

A dissident group refers to a faction within an organization that disagrees with the majority or official policies and seeks to challenge or change them.

Beta

Beta is a measure of the volatility of a security or portfolio compared to the market as a whole. It indicates the tendency of a security's returns to respond to swings in the market.

Market Risk Premium

The supplementary income expected by an investor for investing in a hazardous market portfolio rather than in assets free from risk.

Constant Dividend Growth Rate

The rate at which a company's dividend payments are expected to grow at a constant percentage each year.