Assume the Risk-Free Rate Increases

question 53

Multiple Choice

Assume the risk-free rate increases. This change will ________ the value of call options and ________ the value of put options on shares of stock.

• A) increase; decrease
• B) increase; increase
• C) decrease; decrease
• D) decrease; increase
• E) not affect; not affect

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Definitions:

Altered State

An altered state is a condition of consciousness distinctly different from normal waking state due to factors like meditation, drugs, or sleep.

Consciousness

The condition or characteristic of being conscious of an external entity or an internal aspect of oneself.

Altered States

Conditions in which the mind's perception of the world is significantly different from normal, such as during meditation, hypnosis, or drug-induced experiences.

Consciousness

The state of being awake and aware of one's surroundings and experiences.