Which of the Following Statements Is CORRECT

question 8

Multiple Choice

Which of the following statements is CORRECT?

• A) As the stock's price rises, the time value portion of an option on a stock increases because the difference between the price of the stock and the fixed strike price increases.
• B) Issuing options provides companies with a low cost method of raising capital.
• C) The market value of an option depends in part on the option's time to maturity and also on the variability of the underlying stock's price.
• D) The potential loss on an option decreases as the option sells at higher and higher prices because the profit margin gets bigger.
• E) An option's value is determined by its exercise value, which is the market price of the stock less its striking price.Thus, an option can't sell for more than its exercise value.

---

Definitions:

Socially Transitioning

The process by which an individual changes their public gender expression to align with their gender identity, often involving changes in name, pronouns, clothing, or social interactions.

Depression

An emotional health issue defined by a constantly low spirit or disinterest in activities, resulting in major difficulties in everyday activities.

Confusion

A state of being bewildered or unclear in one's mind about something.

Anger

A strong feeling of displeasure or hostility.