Which of the Following Statements Is FALSE

question 7

Multiple Choice

Which of the following statements is FALSE?

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

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Definitions:

Falling Beam

An accident or hazard involving a beam that collapses or falls from its position, posing a risk of injury or damage.

Emotional Distress

A legal term describing significant mental suffering or anguish inflicted upon a person through wrongful actions by another, which may be grounds for a lawsuit.

Due Care

The effort made by an ordinarily prudent or reasonable party to avoid harm to another party.

Negligence

The failure to exercise a level of care that a reasonably prudent person would in similar circumstances, leading to unintended harm or damage.