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Which of the following is NOT true about call and put options:
A.An American option can be exercised at any time during its life
B. A European option can only be exercised only on the maturity date
C.Investors must pay an upfront price (the option premium) for an option contract
D.The price of a call option increases as the strike price increases

Answer: D
A call option is the option to buy for the strike price. As the strike price increases this option becomes less attractive and is therefore less valuable. A, B, and C are true.

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Flashcard info:

Author: CoboCards-User

Main topic: Finance & Investment

Topic: Derivatives

Published: 27.10.2015

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