Which of the Following Statements About Options Is Not True

question 77

Multiple Choice

Which of the following statements about options is not true?

• A)Covered puts reduce risks.
• B)Options holders generally make money by buying or selling the underlying asset.
• C)Most options expire worthless.
• D)Stock options are considered high-risk.

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Definitions:

Bond Issue

The process of offering bonds for sale to potential investors, typically to raise capital for a corporation or government.

Redeemed

The act of repaying or buying back something, such as repaying a loan, fulfilling a promise, or converting a financial security.

Unamortized Premium

The portion of the bond premium that has not yet been expensed to interest over the life of the bond.

Straight-Line Method

A depreciation technique which evenly spreads the cost of a fixed asset over its useful life.