Question
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.
Question 14 options:
| When the current stock price is below the the strike price, an option is said to be out-the- money. |
| 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. |
| The possibility of increasing capacity at a plant is an example of a real option |
| The exercise value of an option is the payoff from immediately exercising the option minus the price paid for the option contract. |
| A Call option gives its owner the right to buy a share off stock at fixed price within a specified period of time. |
| An American option can only be exercised on its expiration date |
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