Which of the following statements is FALSE?
A) Because an American option cannot be worth less than its intrinsic value, it cannot have a negative time value.
B) An American option with a later exercise date is of more worth than an otherwise identical American option with an earlier exercise date.
C) The value of an option generally decreases with the volatility of the stock.
D) The investor holding a short position in an option has an obligation; he or she takes the opposite side of the contract to the investor who holds the long position.
Answer: C
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A) diversification B) intensive C) target D) integrative E) conglomerate
The journal entry to record direct labor costs actually incurred involves a debit to the ________
A) Work-in-Process Inventory account B) Wages Payable account C) Manufacturing Overhead account D) Raw Materials Inventory account
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Which of the following traditional solutions enables manufacturers to deal with uncertainties in the supply chain?
A) Safety stock B) Continuous replenishment C) Just-in-time strategies D) Demand planning E) Bullwhip effect