Concerning stock index options, which of the following statements is false?
A) Index options appeal to speculators due to the leverage they offer.
B) Investors can write index options.
C) If exercised, the holder of a stock index call receives the underlying stock.
D) Index options are settled in cash.

Question

Quizplus · Accepted Answer

Stock index options are settled in cash, not by delivering the underlying stock. If exercised, the holder receives the cash difference between the index level and the strike price.

Concerning Stock Index Options, Which of the Following Statements Is