Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A) Because an American option cannot be worth less than its intrinsic value, it cannot have a negative time value.
• B) An American option with a later exercise date is of more worth than an otherwise identical American option with an earlier exercise date.
• C) The value of an option generally decreases with the volatility of the stock.
• D) The investor holding a short position in an option has an obligation; he or she takes the opposite side of the contract to the investor who holds the long position.

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Definitions:

Unconditioned Stimulus

In classical conditioning, it's a stimulus that naturally and automatically triggers a response without any learning needed.

Fourth Of July

A federal holiday in the United States commemorating the adoption of the Declaration of Independence on July 4, 1776.

Firecrackers

Small explosive devices designed to produce a large amount of noise, especially in the form of a loud bang; typically used for entertainment or celebration.

Unconditioned Stimulus

In classical conditioning, a stimulus that instinctively and automatically elicits a reflex response without any previous learning.