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11
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
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.
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.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015