Which of the Following Statements Is False

question 24

Multiple Choice

Which of the following statements is false?

• A) Because an American option cannot be worth less than its intrinsic value, it cannot have a negative time value.
• B) An American option with a later exercise date cannot be worth less than an otherwise identical American option with an earlier exercise date.
• C) The value of an option generally decreases with the volatility of the stock.
• D) The intrinsic value is the amount by which the option is currently in-the-money or 0 if the option is out-of-the-money.

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