Which of the Following Statements About Option Contracts Is Incorrect

question 13

Multiple Choice

Which of the following statements about option contracts is incorrect?

• A) The seller of a put option loses if the spot price, plus the premium, is below the exercise price when the option is exercised.
• B) The buyer of a call option benefits if the price of the spot is above the exercise price when the option is exercised.
• C) The buyer of a put option gains if the price of the spot is below the exercise price when the option is exercised.
• D) The seller of a call option loses if the spot price, plus the premium, is below the exercise price when the option is exercised.

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Definitions:

Western Homogeneity

The perception or belief in a shared and uniform set of cultural characteristics, values, and practices across Western nations, overlooking regional and individual diversity.

Neoliberalism

A political and economic philosophy advocating for free market principles, reduced government regulation, and a minimization of the state's role in society.

Individual Liberty

The freedom of individuals to act as they choose, as long as they do not infringe on the equal rights of others, often considered a foundational aspect of democratic societies.

Formal Relations

Social connections and interactions that are governed by officially established rules and structures.