A Decrease in Which of the Following Terms Will Cause

question 56

Multiple Choice

A decrease in which of the following terms will cause an increase in the call value of an option?

• A) Interest rates
• B) Time to maturity
• C) Exercise price
• D) Volatility of the stock

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Definitions:

Expectancy Model

A psychological theory proposing that individuals are motivated to act based on the expected outcomes of their behavior and the value they place on those outcomes.

Motivation

The reason or reasons one has for acting or behaving in a particular way; the drive to achieve goals.

Organizational Citizenship

The voluntary commitments beyond an employee's required tasks that help to improve organizational performance.

Formal Job Duties

Officially assigned tasks and responsibilities that are part of one's employment role.