Which of the following statements is false? The value of an otherwise identical

Question

Which of the following statements is false?

The value of an otherwise identical call option is higher if the strike price the holder must pay to buy the stock is higher.

Because a put is the right to sell the stock, puts with a lower strike price are less valuable.

For a given strike price, the value of a call option is higher if the current price of the stock is higher, as there is a greater likelihood the option will end up in-the-money.

Put-call parity gives the price of a European call option in terms of the price of a European put, the underlying stock, and a zero-coupon bond.

The value of an otherwise identical call option is higher if the strike price the holder must pay to buy the stock is higher.

Because a put is the right to sell the stock, puts with a lower strike price are less valuable.

For a given strike price, the value of a call option is higher if the current price of the stock is higher, as there is a greater likelihood the option will end up in-the-money.

Put-call parity gives the price of a European call option in terms of the price of a European put, the underlying stock, and a zero-coupon bond.

Explanation / Answer

The value of an otherwise identical call option is higher if the strike price the holder must pay to buy the stock is higher. Is a false statement

Explanation:

Correct statement is - The value of an otherwise identical call option is higher if the strike price the holder must pay to buy the stock is lower

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.