Call Option Values INCREASE with ______

question 26

Multiple Choice

Call option values INCREASE with ______.

• A) an increase in the exercise price
• B) an increase in the volatility of the underlying asset value
• C) an increase in the systematic risk (beta) of the asset underlying the option
• D) More than one of the above
• E) None of the above

---

Definitions:

Equilibrium

In economics, a state where market supply and demand balance each other, and as a result, prices become stable.

Coconuts

Tropical fruits or the hard-shelled seeds of the coconut palm, often used metaphorically in economics and game theory to represent tradable resources.

Civic Authorities

Government officials or bodies responsible for governing a city or town, and managing local services and regulations.

Long-run Supply Function

An economic concept that describes the total quantity of products that firms are willing to supply over a long period, taking into account the adjustments in production factors and technology.