Which of the Following Statements Is Correct

question 10

Multiple Choice

Which of the following statements is correct?

• A) Call and put options increase in price if the exercise price is increased.
• B) Call and put options increase in price if the volatility of the underlying asset is decreased.
• C) Call and put options increase in price if the time to expiry is increased.
• D) Call and put options increase in price if the opportunity cost of funds is increased.

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Definitions:

Molecules

Molecules are groups of two or more atoms held together by chemical bonds, forming the smallest identifiable unit into which a pure substance can be divided while retaining its composition and chemical properties.

Ions

Atoms or molecules with an electrical charge due to the loss or gain of one or more electrons.

Molecule

A molecule is the smallest unit of a chemical compound that retains its chemical properties, consisting of two or more atoms bonded together.

Stable

Refers to an object, substance, or system that remains unchanged or resists change in conditions or under pressure.