Which of the Following Is NOT True About Call and Put

question 16

Multiple Choice

Which of the following is NOT true about call and put options:

• A) An American option can be exercised at any time during its life
• B) A European option can only be exercised only on the maturity date
• C) Investors must pay an upfront price (the option premium) for an option contract
• D) The price of a call option increases as the strike price increases

---

Definitions:

Marketable Securities

Financial instruments and assets that can be easily sold or converted into cash without a significant loss of value.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the owners' claim on the company's assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets, calculated as current assets divided by current liabilities.