Which of the following statements is are false about options?
A)A call option is more valuable when the value of the underlying security is more volatile.
B)An American option can never be worth less than a European option.
C)An option buyer has the right, not the obligation, to buy or sell an asset at a predetermined price over a fixed time interval.
D)A put option is more valuable when the value of the underlying security is less volatile.
E)All of the above is false.

Question

Quizplus · Accepted Answer

A put option increases in value when the underlying security's price decreases, and volatility generally increases the value of options because it raises the potential for the option to end up in the money. Therefore, a put option is actually more valuable when the underlying security is more volatile, not less.

Which of the Following Statements Is Are False About Options