Which of the Following Statements Is FALSE

question 30

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 is of more worth 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 investor holding a short position in an option has an obligation; he or she takes the opposite side of the contract to the investor who holds the long position.

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Definitions:

Circadian Rhythms

Biological processes that display an endogenous, entrainable oscillation of about 24 hours, affecting various physiological functions in living organisms.

Reticular Activating System

A network of nerves in the brainstem that plays a key role in controlling arousal and the transition between sleep and wakefulness.

Sleep Deprivation

A condition resulting from insufficient sleep, which can impact mental, emotional, and physical health.

Usual Sleep Patterns

The typical sequence and timing of sleep stages and awake periods experienced by an individual over a 24-hour period.