Which of the Following Is True for a Call Option

question 15

Multiple Choice

Which of the following is true for a call option on a stock worth $50

• A) As a stock's expected return increases the price of the option increases
• B) As a stock's expected return increases the price of the option decreases
• C) As a stock's expected return increases the price of the option might increase or decrease
• D) As a stock's expected return increases the price of the option on the stock stays the same

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Definitions:

Cost of Goods Sold

An accounting term for the direct expenses related to producing the goods sold by a company, including materials and labor.