Which of the Following Statements Is FALSE

question 37

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 cannot be worth less 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 intrinsic value is the amount by which the option is currently in-the-money or 0 if the option is out-of-the-money.

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Definitions:

Entitlement Pay

Financial compensation granted to employees based on their title, status, or seniority rather than their performance or productivity.

Intrinsic Rewards

Refers to the internal and psychological rewards individuals receive from engaging in activities that are inherently satisfying or fulfilling.

Symbolic Tokens

Items, gestures, or actions used to represent or signify larger concepts, beliefs, or values.

Work Setting

The physical and social environment in which professional duties are carried out.