Which Option Price(s)will Increase When the Interest Rate Increases

question 6

Multiple Choice

Which option price(s) will increase when the interest rate increases?

• A)both the call and put
• B)call only
• C)put only
• D)neither the call nor the put
• E)Answer cannot be determined from the information provided.

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Definitions:

Limestone

A type of sedimentary rock, primarily composed of calcium carbonate, often formed from the remains of marine organisms.

Shale

A fine-grained sedimentary rock formed from clay and silt-sized particles, often easily split into thin, parallel layers.

Impermeable Layers

Geological strata that do not allow the passage of water or fluids due to their tightly packed nature.

Permeable Rocks

Rocks that contain pores or cracks through which fluids such as water can easily pass.