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:

Myelin Sheaths

Protective coverings around nerve fibers that increase the speed at which electrical impulses propagate along the nerve cells.

White Matter

Brain tissue composed of myelinated nerve fibers that connect different areas of the brain, facilitating communication among neurons.

Synapses

Structures that permit a neuron (nerve cell) to pass an electrical or chemical signal to another neuron, essential for the transmission of nerve impulses.

Neurotransmitter

A chemical secreted by a neuron sending a message that carries the impulse across the synaptic gap to the receiving cell.