The Value of a Call Option Increases as the Time

question 81

Multiple Choice

The value of a call option increases as the time to expiration increases because:

• A)The exercise price continually decreases
• B)Opportunity increases to surpass exercise price
• C)Dividends accumulate while waiting to be paid
• D)The option can be repeatedly exercised

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Definitions:

Gluconeogenesis

A metabolic pathway that generates glucose from non-carbohydrate substrates like protein or fat, chiefly in the liver.

Catabolic

Related to catabolism, the process of breaking down complex molecules into simpler ones, releasing energy in the body.

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to release stored energy through the oxidation of acetyl-CoA derived from carbohydrates, fats, and proteins.

Oxaloacetic

Relating to oxaloacetic acid, a four-carbon molecule critical in the citric acid cycle for energy production within cells.