Which of the Following Statements Is FALSE

question 31

Multiple Choice

Which of the following statements is FALSE?

• A)The market price of the option is also called the 'exercise price'.
• B)As with other financial assets, options can be bought and sold. Standard share options are traded on organised exchanges, while more specialised options are sold through dealers.
• C)The 'option buyer', also called the 'option holder', holds the right to exercise the option and has a long position in the contract.
• D)If the payoff from exercising an option immediately is positive, the option is said to be 'in-the-money'.

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Definitions:

Net Cash Flow

measures the difference between a company's cash inflows and outflows within a specific period, indicating its overall liquidity position.

Cumulative Surplus

The total accumulated excess of income over expenses and losses over a period.

Net Cash Inflow

The difference between a business's cash inflows and cash outflows over a specific period.

Minimum Cash Balance

The least amount of cash a company aims to hold on hand to meet immediate operational and financial demands.