Question: 3. Consider two European put options with the same expiration dates and the same strike prices. The underlying assets of the two options are different.

3. Consider two European put options with the same expiration dates and the same strike prices. The underlying assets of the two options are different. One option is for stock A whose current price is $50 and has the volatility of 30%. The other is for stock B whose current price is $45 and has the volatility of 25%. Both stock A and B will pay no dividends. The price of put A is always higher than the price of put B.

(a) True

(b) False

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