In the Valuation of an Option Contract,the Following Statements Apply

question 36

Multiple Choice

In the valuation of an option contract,the following statements apply except

• A) The value of an option increases with its maturity.
• B) There is a negative relationship between the market interest rate and the value of a call option.
• C) The value of a call option is negatively related to its exercise price.
• D) The value of a call option is positively related to the volatility of the underlying asset.
• E) The value of a call option is positively related to the price of the underlying stock.

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Definitions:

Noncoding Sequences

DNA sequences that do not code for proteins but may have regulatory roles or be involved in RNA production.

Mismatch Repair

A DNA repair mechanism in which special enzymes recognize the incorrectly paired nucleotides and remove them. DNA polymerases then fill in the missing nucleotides.

Nucleotide Excision Repair

A DNA repair mechanism commonly used to repair a damaged segment of DNA caused by the sun’s ultraviolet radiation or by harmful chemicals.

Incorrectly Paired Nucleotides

Mismatches in the base pairing of DNA strands, which can result in mutations or errors in DNA replication and transcription.