Why Is the Value of a Call Option Said to Increase

question 76

Multiple Choice

Why is the value of a call option said to increase as the interest rate increases?

• A) The stock seller must pay the call owner more interest.
• B) The present value of the strike price is reduced.
• C) As interest rates increase, stock prices increase.
• D)Interest rate increases reduce the option premium.

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Definitions:

Collective Bargaining

The process by which labor unions negotiate with employers on behalf of their members regarding terms of employment, such as wages and work conditions.

Management

The process of planning, organizing, leading, and controlling resources to achieve organizational goals.

Labor Unions

Organizations that represent the collective interests of workers in negotiations with employers over wages, benefits, and working conditions.

Career Management

The ongoing process of setting personal career objectives and planning strategies to achieve them.