Which one of the following statements is NOT true?

Question

Quizplus · Accepted Answer

Option A is true as the buyer of a call option has the right but not the obligation to buy the underlying asset at the strike price, hence the value of the option can never go negative. Option B is also true as the maximum value a call option can have is when the stock price equals or exceeds the strike price (at expiration), hence the value of the call option cannot be more than the stock price. Option C is true as the option buyer would not exercise the option if it were worth less than the asset price minus the present value of the strike price. However, option D is incorrect as in certain situations such as deep in-the-money, a call option can be worth more than the strike price.

Which One of the Following Statements Is NOT True