Which of the following statements is FALSE?
A)Because an option is a contract between two parties, for every owner of a financial option, there is also an option writer, the person who takes the other side of the contract.
B)There are two kinds of options. European options allow their holders to exercise the option on any date up to and including a final date called the expiration date.
C)When a holder of an option enforces the agreement and buys or sells a share at the agreed-upon price, he is 'exercising the option'.
D)The price at which the holder buys or sells the share when the option is exercised is called the 'exercise price'.

Question

Quizplus · Accepted Answer

European options allow their holders to exercise the option only on the expiration date, not any date up to and including it. The description in statement B is actually referring to American options.

Which of the Following Statements Is FALSE