Which of the Following Statements Is Correct

question 15

Multiple Choice

Which of the following statements is correct?

• A)If the underlying stock does not pay a dividend, it does not make good economic sense to exercise a call option prior to its expiration date, even if this would yield an immediate profit.
• B)Call options generally sell at a price greater than their exercise value, and the greater the exercise value, the higher the premium on the option is likely to be.
• C)Call options generally sell at a price below their exercise value, and the greater the exercise value, the lower the premium on the option is likely to be.
• D)Call options generally sell at a price below their exercise value, and the lower the exercise value, the lower the premium on the option is likely to be.

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Definitions:

Social Construction

A theory in sociology and philosophy which posits that many aspects of society, including knowledge, are not inherent but are instead created by societal groups and interactions.

Genetic Influences

The effects that the genetic makeup of an individual has on their traits, behaviors, and susceptibilities to conditions.

Social Construction

A concept or perception of reality influenced and constructed by societal norms and interactions.