Which of the Following Is True About Options

question 3

Multiple Choice

Which of the following is true about options?

• A)​Generally, higher volatility of the underlying increases the value of the option.
• B)​The value of an option is realized only through its being exercised.
• C)​An American option is exercisable at its maturity date.
• D)​An option premium is refundable if the option becomes unfavorable.

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Definitions:

Job Relatedness

The relevance or connection of a task or requirement to the core functions of a specific job position.

Bona Fide Seniority System

A legitimate system in a workplace that rewards employees based on length of service, often affecting pay and promotions.

Business Necessity

A legitimate, documented reason for a business action that is essential for the operation or survival of the business.

Illegal Discrimination

Unfair or unequal treatment of an individual or group based on certain characteristics deemed by law, such as race, age, sex, religion, or disability.