Which of the following statements is FALSE?
A)When a holder of an option enforces the agreement and buys or sells a share of stock at the agreed-upon price,he is exercising the option.
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)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.
D)The price at which the holder buys or sells the share of stock when the option is exercised is called the strike price or exercise price.

Question

Quizplus · Accepted Answer

This statement is false because European options can only be exercised on the expiration date, not any date up to and including it. American options, on the other hand, can be exercised at any time prior to the expiration date.

Which of the Following Statements Is FALSE