Which of the Following Statements Regarding Factors That Affect Call

question 10

Multiple Choice

Which of the following statements regarding factors that affect call option prices is CORRECT?

• A) The longer the time until the call option expires the smaller its value and the smaller its premium.
• B) An option on an extremely volatile stock is worth less than one on a very stable stock.
• C) The price of a call option increases as the risk-free rate increases.
• D) Two call options on the same stock will have the same value even if they have different strike prices.
• E) If you observe that a put option on a stock increases in value,then a call option on that same stock also increases in value.

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