Which of the Following Statements Is Correct

question 6

Multiple Choice

Which of the following statements is correct?

• A)Call options generally sell at a price less than their exercise value.
• B)If a stock becomes riskier (more volatile), call options on the stock are likely to decline in value.
• C)Call options generally sell at prices above their exercise value, but for an in-the-money option, the greater the exercise value in relation to the strike price, the lower the premium on the option is likely to be.
• D)Because of the put-call parity relationship, under equilibrium conditions, a put option on a stock must sell at exactly the same price as a call option on the stock.

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