Which of the Following Statements Is FALSE

question 7

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 an identical American option.
• C) Put options increase in value as the stock price falls.
• D) A put option cannot be worth more than its strike price.

---

Definitions:

Classical Economists

Economists who believe in self-regulating markets where competition leads to efficient outcomes without government intervention.

Investment

The act of allocating resources, often financial, into something expecting it to generate income or profit.

Saving

The portion of income not spent on current consumption but set aside for future use.

Fiscal Policy

Policies by the government involving taxes and expenditure to impact the economic situation.