Which of the Following Statements Is False

question 29

Multiple Choice

Which of the following statements is false?

• A) A holder would not exercise an in-the-money option.
• B) The option seller, also called the option writer, sells (or writes) the option and has a short position in the contract.
• C) Because the long side has the option to exercise, the short side has an obligation to fulfill the contract.
• D) When the exercise price of an option is equal to the current price of the stock, the option is said to be at-the-money.

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Definitions:

Shares Of Stock

Units of ownership interest in a corporation or financial asset, representing a portion of a company's capital.

Top Management

The highest tier of executives and decision-makers in a company, including roles such as CEO, CFO, and other senior leaders responsible for strategic decisions.

Financial Authority

An entity or individual with the power to manage financial matters, including investments, budget allocation, and financial planning.