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Which of the Following Will Result from a Decrease in an Option's

question 77

Multiple Choice

Which of the following will result from a decrease in an option's strike price?
I. increase in call option price
II. decrease in call option price
III. increase in put option price
IV. decrease in put option price


Definitions:

Bankruptcy Relief

Legal measures available to individuals or corporations that cannot meet their financial obligations, allowing for reorganization or discharge of debts.

Preferential Payment

A financial transaction that gives prior payment to one creditor over others before a debtor's bankruptcy.

Insolvent Debtor

A debtor who cannot pay debts in a timely fashion.

Purchase Money Security Interest

A legal claim that allows creditors to repossess or claim goods as collateral if the buyer fails to meet the terms of the credit agreement, specifically concerning goods that were purchased with the loan.

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