The Current Market Value of a Stock Option Contract to Purchase

question 231

Multiple Choice

The current market value of a stock option contract to purchase 1,000 shares of IBM stock at a price of $100 that can be exercised five years from now would

• A) increase if the expected future price of IBM stock rose.
• B) increase if the expected future price of IBM stock fell.
• C) decrease if the expected future price of IBM stock rose.
• D) remain unchanged regardless of the expected future price of IBM stock.

---

Definitions:

Raphael

An Italian painter and architect of the High Renaissance, celebrated for the perfection and grace in his artworks, including the School of Athens.

Netherlandish Art

Art originating from the Netherlands, especially during the 15th and 16th centuries, known for its detailed realism and innovative use of oil paint.

Painting Style

The distinctive methods, techniques, and aesthetics used by an artist or within an art movement.

Mannerism

A style of later Renaissance art that emphasized “artifice,” often involving contrived imagery not derived directly from nature. Such artworks showed a self-conscious stylization involving complexity, caprice, fantasy, and polish. Mannerist architecture tended to flout the classical rules of order, stability, and symmetry, sometimes to the point of parody.