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:

Facilitated

To facilitate means to make an action or process easier or to assist in the progress of something, often by providing necessary resources, information, or support.

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