Which of the Following Is NOT True Regarding Options

question 43

Multiple Choice

Which of the following is NOT true regarding options?

• A)As time passes, the option's price line approaches its intrinsic value.
• B)The premium on an 'at-the-money' option is all time value.
• C)All else being equal, you would prefer a call option with a lower exercise price.
• D)The seller of an option must post a margin deposit.
• E)Options must be held to expiration.

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Definitions:

Oil Embargo

Prohibition on trade in oil declared by the Organization of Petroleum Exporting Countries, dominated by Middle Eastern producers, in October 1973 in response to U.S. and western European support for Israel in the 1973 Yom Kippur War. The rise in gas prices and fuel shortages resulted in a global economic recession and profoundly affected the American economy.

Middle Eastern Arab Countries

Middle Eastern Arab Countries refers to the nations in the Middle East region that have Arabic as a dominant or official language, sharing cultural, historical, and linguistic ties.

U.S. Support For Israel

Refers to the political, military, and economic backing provided by the United States to the state of Israel, a key aspect of both countries' foreign policies.