Because of Arbitrage, the Price of an Option

question 78

Multiple Choice

Because of arbitrage, the price of an option

• A)exceeds its intrinsic value
• B)is less than its intrinsic value
• C)cannot be less than its intrinsic value
• D)cannot be greater than its intrinsic value

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Definitions:

1910

Refers to the year which marked significant events globally such as the start of the Mexican Revolution and advancements in technology and society at the early 20th century.

Late Nineteenth Century

A period from 1870 to 1900 characterized by significant industrial, social, and political changes in many parts of the world.

Early Twentieth Centuries

The period from the start of the 1900s through the early 1930s, a time of significant global change and upheaval.

United States

A country in North America founded in 1776, comprised of 50 states, known for its vast size and diversity.