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:

Collective Effervescence

A concept to describe the sense of energy and harmony people feel when they come together in a group around shared purposes.

Sacred

Regarded with great respect and reverence, often in a religious or spiritual context.

General Social Survey

A sociological survey conducted in the United States to collect data on demographic characteristics, behaviors, attitudes, and opinions across a wide range of topics.

Collective Effervescence

A communal sense of energy and harmony experienced by members of a group during rituals or shared activities, a concept introduced by Emile Durkheim.