Which of the Following Statements Is CORRECT

Which of the following statements is CORRECT?

A) call options generally sell at a price greater than their exercise value, and the greater the exercise value, the higher the premium on the option is likely to be.
B) call options generally sell at a price below their exercise value, and the greater the exercise value, the lower the premium on the option is likely to be.
C) call options generally sell at a price below their exercise value, and the lower the exercise value, the lower the premium on the option is likely to be.
D) because of the put-call parity relationship, under equilibrium conditions a put option on a stock must sell at exactly the same price as a call option on the stock.
E) if the underlying stock does not pay a dividend, it does not make good economic sense to exercise a call option prior to its expiration date, even if this would yield an immediate profit.

Correct Answer:

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