The Dollar Change in the Value of a Stock Call

question 39

Multiple Choice

The dollar change in the value of a stock call option is always

• A)lower than the dollar change in the value of the stock.
• B)higher than the dollar change in the value of the stock.
• C)negatively correlated with the change in the value of the stock.
• D)higher than the dollar change in the value of the stock and negatively correlated with the change in the value of the stock.

---

Definitions:

Market Value

The amount for which something can be sold in a given market at a particular time.

Book Value

The net value of a company's assets minus its liabilities, as reported on the balance sheet, often used to assess a company's financial health.

Mortgage Payable

A long-term liability on a balance sheet, representing money owed on a property loan that is to be paid back over time.

Capital Balance

Capital balance represents the amount of capital attributed to the owners or shareholders of a company, reflecting their stake in the entity.