The Value of a Call Option Increases as the Time

question 30

Multiple Choice

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

• A) the exercise price continually decreases.
• B) the opportunity increases for the stock price to surpass the exercise price.
• C) the dividends accumulate while waiting to be paid.
• D)the option can be repeatedly exercised.

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Definitions:

Persistent Failure

The ongoing inability to achieve success or meet objectives.

Long Term

Relating to or involving an extended period of time, typically emphasizing planning or thinking that takes into account the distant future rather than just immediate needs.

Z Problem-Solving Model

A decision-making framework that emphasizes a balanced view by considering multiple perspectives and sequenced steps to arrive at solutions.

Generate Alternatives

The process of developing multiple options or solutions to a problem or situation.