Which of the Following Is the Higher Priced Call Option

question 12

Multiple Choice

Which of the following is the higher priced call option?

• A)Higher S_T, higher X, increased volatility
• B)Higher S_T, higher X, decreased volatility
• C)Higher S_T, lower X, increased volatility
• D)Lower S_T, higher X, decreased volatility

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Definitions:

Product's Price

The amount of money charged for a good or service, determined by supply and demand factors in the market.

Productivity of Labor

The measure of output per unit of labor input, indicating how efficiently labor is being used in the production process.

Equilibrium Quantity

The supply and demand of goods or services at the price where they are balanced.

Marginal Productivity

The additional output derived from the use of one more unit of a variable input while other inputs remain constant.