Which of the following is not true? choose one)
A) When an ASX call option on BHP is exercised, BHP issues more stock.
B) An American option can be exercised at any time during its life.
C) A European call option will always be exercised at maturity if the underlying asset price is greater than the strike price.
D) A European put option will always be exercised at maturity if the strike price is greater than the underlying asset price.

Question

Which of the following is not true? choose one) 
A) When an ASX call option on BHP is exercised, BHP issues more stock.
B) An American option can be exercised at any time during its life.
C) A European call option will always be exercised at maturity if the underlying asset price is greater than the strike price.
D) A European put option will always be exercised at maturity if the strike price is greater than the underlying asset price.

Quizplus · Accepted Answer

When an ASX call option on BHP is exercised, BHP does not issue more stock. Instead, the shares are transferred from one investor to another. The company itself is not involved in the transaction.

Which of the Following Is Not True? Choose One)