When the Time to Maturity Increases with All Else Remaining

question 17

Multiple Choice

When the time to maturity increases with all else remaining the same,which of the following is true?

• A) European options always increase in value
• B) The value of European options either stays the same or increases
• C) There is no effect on European option values
• D) European options are liable to increase or decrease in value

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Definitions:

Bourgeoisie

The social class that owns the means of production in a capitalist society, typically contrasted with the working class or proletariat.

Capitalism

An economic system characterized by private or corporate ownership of capital goods, by investments determined by private decision, and by prices, production, and the distribution of goods determined mainly by competition in a free market.

Economist Amartya Sen

An Indian economist and philosopher, noted for his contributions to welfare economics, social choice theory, and for his work on famine, human development theory, and the underlying mechanisms of poverty.

Famine

Famine is a severe shortage of food, often due to disaster, war, or economic failure, leading to widespread hunger and malnutrition.