The Premium on a Share- Index Call Would Be Expected

question 11

Multiple Choice

The premium on a share- index call would be expected to increase as the

• A) option life nears expiration.
• B) index price falls further below the strike price.
• C) underlying securities stabilise in value.
• D) market becomes more volatile.

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Definitions:

Ramses II

An Egyptian Pharaoh of the Nineteenth Dynasty, known for his extensive building programs and for the Battle of Kadesh.

Abu Simbel

An ancient temple complex in southern Egypt, built by Pharaoh Ramesses II, notable for its massive rock-cut sculptures.

Temple

A building devoted to the worship, or regarded as the dwelling place, of a god or gods or other objects of religious reverence.

Demotic

Late Egyptian writing.