Which of the Following Statements Is FALSE

question 44

Multiple Choice

Which of the following statements is FALSE?

• A)A share can be thought of as a put option on the assets of the firm with an exercise price equal to the value of debt outstanding.
• B)The option price is more sensitive to changes in volatility for at-the-money options than it is for in-the-money options.
• C)In the context of corporate finance, equity is at-the-money when a firm is close to bankruptcy.
• D)Because the price of equity is increasing with the volatility of the firm's assets, equity holders benefit from a zero-NPV project that increases the volatility of the firm's assets.

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Definitions:

Source Countries

Countries from which people emigrate or seek refuge, often in the context of migration studies.

Convention Refugee

Individual who has been granted asylum by the 1951 Geneva Convention Relating to the Status of Refugees; someone who has reason to fear persecution in his or her country of origin due to race, religion, nationality, membership in a social group, or political opinion.

Protected Person

Someone who, according to the Immigration and Refugee Protection Act, meets the definition of a Convention refugee and can also mean a person in Canada who, if they were sent home, would be tortured or at risk of cruel and unusual treatment or punishment.

Privately Sponsored Refugee

A refugee who is supported financially and socially by private individuals or groups rather than by the government directly.