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29 June, 07:12

Which of the following is NOT true? (Present values are calculated from the end of the life of the option to the beginning.) A. An American put option is always worth less than the present value of the strike price B. A European put option is always worth less than the present value of the strike price C. A European call option is always worth less than the stock price D. An American call option is always worth less than the stock price

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  1. 29 June, 07:16
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    A. An American put option is always worth less than the present value of the strike price

    Explanation:

    Put option refers to a stock market instrument which gives the holder an option to sell an asset at an agreed price on or before a particular date.

    Each contract covers around 100 shares for stock options.

    An American call option provides the holder with the right to purchase an asset, while a put option provides the holder an option to sell it.

    A European option can be implemented only at the expiration date of the option and an American option can be implemented at any time before the expiration date.

    An American put option is always worth less than the present value of the strike price.

    So, option A. is correct
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Home » Business » Which of the following is NOT true? (Present values are calculated from the end of the life of the option to the beginning.) A. An American put option is always worth less than the present value of the strike price B.
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