An Increase in Which One of the Following Will Decrease

question 74

Multiple Choice

An increase in which one of the following will decrease the value of a call option?

• A) Interest rate
• B) Time to expiration
• C) Volatility of stock price
• D)Exercise price

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Definitions:

Trade

The exchange of goods, services, or both between parties, often involving the transfer of money.

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type; commodities are often used as inputs in the production of other goods or services.

Comparative Advantage

The competency of a country, individual, corporation, or region to manufacture a good or provide a service at a reduced opportunity cost than that of its competition.

Relative Efficiency

A measure of how effectively an entity (such as a firm or economy) utilizes its resources compared to another, often used to identify opportunities for improvement.