Which of the Following Statements Is FALSE

question 56

Multiple Choice

Which of the following statements is FALSE?

• A)Because a short position in an option is the other side of a long position,the profits from a short position in an option are just the negative of the profits of a long position.
• B)The deeper out-of-the-money the put option is,the less negative its beta,and the higher is its expected return.
• C)Although payouts on a long position in an option contract are never negative,the profit from purchasing an option and holding it to expiration could well be negative because the payout at expiration might be less than the initial cost of the option.
• D)The put position has a higher return in states with low stock prices;that is,if the stock has a positive beta,the put has a negative beta.

---

Definitions:

Mental Health Complaint

Any grievance or issue related to one's mental health, ranging from diagnoses and treatment dissatisfaction to concerns about care accessibility.

Pick's Disease

A rare type of progressive dementia that affects the brain's frontal and temporal lobes, leading to changes in personality, behavior, and language.

Creutzfeldt-Jakob Disease

A rare, degenerative, invariably fatal brain disorder affecting about one in every one million people per year.

Huntington's Disease

A fatal genetic disorder that causes the progressive breakdown of nerve cells in the brain, affecting an individual’s functional abilities.