The Premium on an Existing Call Option Should ____ When

question 18

Multiple Choice

The premium on an existing call option should ____ when the price of the underlying stock decreases.

• A)be negative
• B)decline
• C)increase
• D)be unaffected
• E)be negative AND decline

---

Definitions:

Asset Account

An account on a company's balance sheet that represents the value of all assets that the company owns.

Unearned Rent

Income received for rent that has not yet been earned because the period covered by the payment has not yet passed.

Rental Income

Income received from renting out property or other assets.

Rent Expense

Costs incurred from leasing a property or space for business operations or personal use.