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2.Which of the following is NOT true
A.When a CBOE call option on IBM is exercised, IBM issues more stock
B.An American option can be exercised at any time during its life
C.An call option will always be exercised at maturity if the underlying asset price is greater than the strike price
D.A put option will always be exercised at maturity if the strike price is greater than the underlying asset price.

Answer: A
When an IBM call option is exercised the option seller must buy shares in the market to sell to the option buyer. IBM is not involved in any way. Answers B, C, and D 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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