Final answer:
D. Options will be less valuable if the underlying stock's price is falling.
Step-by-step explanation:
Out of the given options, options will be less valuable if the underlying stock's price is falling.
Options are financial derivatives that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price (known as the strike price) within a specific period of time. If the price of the underlying stock is falling, it is unlikely that the buyer of the option will exercise their right to buy or sell at the strike price, making the options less valuable in the market.
On the other hand, bonds, preferred stock, and common stock may still hold some value even if the underlying stock's price is falling. Bonds provide fixed interest payments, preferred stock gives priority to its holders in terms of dividend payments, and common stock represents ownership in a company, which has the potential for future growth and dividends.