Which of the Following Statements Is False

question 19

Multiple Choice

Which of the following statements is false?

• A) The intrinsic value of an option is the value it would have if it expired immediately.
• B) A European option cannot be worth less than its American counterpart.
• C) Put options increase in value as the stock price falls.
• D) A put option cannot be worth more than its strike price.

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Definitions:

Cost Of Goods Sold

Direct costs attributable to the production of goods sold by a company, including materials, labor, and overhead.

Merchandise

Goods that are purchased, stored, and sold by a business in the ordinary course of its operations, often referred to as inventory.

Gross Profit Rate

The gross profit rate, also known as gross profit margin, is the ratio of gross profit (sales minus cost of goods sold) to sales, expressed as a percentage.

Merchandise Available

The total quantity of goods available for sale, including beginning inventory plus purchases made during the period.