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Which of the following statements are true? There are several, select all that are correct. Consider each statement on its own separate from the others
Which of the following statements are true? There are several, select all that are correct. Consider each statement on its own separate from the others listed.
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An American option can only be exercised on its expiration date
An option is a contract that gives the seller the right to buy or sell an asset at some predetermined price within a specified period of time
An option's value is determined by its exercise value, which is the market price of the stock less its striking price. Thus, an option can't sell for more than its exercise value.
An American option's price always will be greater than or equal to its exercise value.
When the current stock price is below the the strike price, an option is said to be outthe money.
The strike price of an option is sometimes called the exercise price
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