Which of the Following Statements Is False

question 2

Multiple Choice

Which of the following statements is false?

• A) For a call written on a stock with a positive beta, the beta of the call always exceeds the beta of the stock.
• B) The beta of a put option written on a negative beta stock is always negative.
• C) As the stock price changes, the beta of an option will change, with its magnitude falling as the option goes in-the-money.
• D) A put option is a hedge, so its price goes up when the stock price goes down.

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Definitions:

Protecting Competition

Efforts and regulations put in place to ensure fair competition among businesses within a market, preventing monopolies and fostering innovation.

Federal Trade Commission Act

A United States law established in 1914 to promote competition and protect consumers from anticompetitive practices, deceptive advertising, and unfair business practices.

Sherman Antitrust Act

An 1890 U.S. law aimed at promoting fair competition by prohibiting monopolies and other activities that restrict trade.

Fair Trade Act

Legislation aimed at ensuring fair trade practices, protecting consumer rights, and encouraging ethical and equitable trading conditions.