Which of the Following Statements Is FALSE

question 49

Multiple Choice

Which of the following statements is FALSE?

• A)When the exercise price of an option is equal to the current share price, the option is said to be 'at-the-money'.
• B)Because the 'long side' has the option to exercise, the 'short side' has an obligation to fulfil the contract.
• C)A holder would not exercise an 'in-the-money' option.
• D)The 'option seller', also called the 'option writer', sells (or writes)the option and has a short position in the contract.

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Definitions:

Ordinary Maintenance

Refers to routine upkeep and repairs necessary to maintain assets in their current condition without improving or extending their life.

Long-Lived Assets

Tangible or intangible resources owned by a company with a useful life extending beyond one year, such as buildings, equipment, and patents.

Sales Taxes

Taxes imposed by governments on sales of goods and services, collected by the seller.

Asset Improvements

Expenditures made to enhance the efficiency, capacity, or lifespan of an asset, leading to an increase in its value.