Which of the Following Statements Is FALSE

question 45

Multiple Choice

Which of the following statements is FALSE?

• A)Put options increase in value as the share price falls.
• B)A put option cannot be worth more than its exercise price.
• C)A European option cannot be worth less than its American counterpart.
• D)The intrinsic value of an option is the value it would have if it expired immediately.

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Definitions:

Indirect Method

A technique used in financial accounting to calculate cash flows from operations by adjusting net income for non-cash transactions.

Operating Activities

The primary, day-to-day activities of a business that relate to its production, sales, and delivery of goods and services.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, representing the wear and tear on the asset over time.

Statement of Cash Flows

A document that provides insight into how alterations in balance sheet items and earnings affect cash and cash-like assets, dissecting the analysis into operating, investing, and financing divisions.