Which One of the Following Will Cause the Value of a Call

question 72

Multiple Choice

Which one of the following will cause the value of a call to decrease?

• A) lowering the exercise price
• B) increasing the time to expiration
• C) increasing the risk-free rate
• D) lowering the risk level of the underlying security
• E) increasing the stock price

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Definitions:

Development

The process of growth or progress, often marked by a series of changes or stages, in the context of individuals, societies, or organisms.

Gradual

describes a process happening in small degrees, steps, or stages over a period, rather than suddenly.

Continuous Process

An operation or production system where input materials are continuously fed and processed, resulting in a continuous output.

The Origin of Species

Refers to Charles Darwin's seminal work on evolutionary biology, proposing the theory of natural selection.