Which of the Following Statements Is FALSE

question 38

Multiple Choice

Which of the following statements is FALSE?

• A)An American call on a non-dividend-paying stock has the same price as its European counterpart.
• B)The price of any call option on a non-dividend-paying stock always exceeds its intrinsic value.
• C)It is never optimal to exercise a call option on a dividend-paying stock early-you are always better off just selling the option.
• D)If present value of the dividend payment is large enough,the time value of a European call option can be negative,implying that its price could be less than its intrinsic value.

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Definitions:

Declared Independence

The formal assertion by a specific territory or group that it is independent and constitutes a state, no longer under the control or governance of a foreign power.

Heavily Industrialized

Pertains to regions or economies that are significantly developed in terms of manufacturing, factory operations, and industrial sector activities.

Internal Dialogue

The conversation within one's mind, reflecting on thoughts, feelings, and decisions, often used in literature to reveal a character's inner conflicts.

Strategic Importance

The significance of a location, asset, or action due to its potential impact on an entity's overall strategic objectives, often in military, economic, or political terms.