The Value of a Call Option Increases as the Time

question 4

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:

Humans

Homo sapiens, the only extant members of the hominid family, characterized by their use of language, ability to create complex tools, and establishment of social structures.

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates, including natural, social, and built factors.

Timber

Wood that has been processed into beams and planks, a stage in the process of wood production.

Crops

Cultivated plants or agricultural produce, such as grain, vegetables, or fruit, considered as a group.