Which of the Following Statements Is FALSE

question 13

Multiple Choice

Which of the following statements is FALSE?

• A)The value of an option generally decreases with the volatility of the share.
• B)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.
• C)Because an American option cannot be worth less than its intrinsic value, it cannot have a negative time value.
• D)An American option with a later exercise date cannot be worth less than an otherwise identical American option with an earlier exercise date.

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