Which One of the Following Statements Is NOT True

question 24

Multiple Choice

Which one of the following statements is NOT true?

• A) The value of a put option can never be negative.
• B) The value of a put option can never be worth more than the underlying asset.
• C) The value of a put option can never be less than the present value of the strike price minus the current value of the underlying asset.
• D) All the above statements are true.

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Definitions:

Efficient Market

A market theory that suggests all available information is already reflected in stock prices, hence investments cannot consistently outperform the market.

Profit Opportunities

Situations in which it is possible for businesses or individuals to make a financial gain.

Opportunity Cost

The penalty of not picking the second most preferable solution in the decision process.

Agricultural Output

The total quantity of agricultural products, such as crops and livestock, produced within a specified period.