If the market is in equilibrium, then an option must sell at a price that is exactly equal to the difference between the stock's current price and the option's strike price.

a. True

b. False

Question

Business

Isaac Lynch

21 September, 04:54

If the market is in equilibrium, then an option must sell at a price that is exactly equal to the difference between the stock's current price and the option's strike price.

a. True

b. False

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Answers (1)

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Skylar Delacruz · Answer 1

b. False

Explanation:

A balanced market means that there is an equivalence between the supply and demand for a certain good or service, that is, this is an occasion where the market lines are matched and will tend to remain stable for a period of time. In this scenario, the option's strike price should seek to maintain this balance and be proportionate to their demands. In this case, it is not necessary for the option to be sold at a price exactly equal to the difference between the stock's current price and the option's strike price.

If the market is in equilibrium, then an option must sell at a price that is exactly equal to the difference between the stock's current price and the option's strike price.a. Trueb. False

If the market is in equilibrium, then an option must sell at a price that is exactly equal to the difference between the stock's current price and the option's strike price.

a. True

b. False