When the Stock Price Increases with All Else Remaining the Same,which

question 15

Multiple Choice

When the stock price increases with all else remaining the same,which of the following is true?

• A) Both calls and puts increase in value
• B) Both calls and puts decrease in value
• C) Calls increase in value while puts decrease in value
• D) Puts increase in value while calls decrease in value

---

Definitions:

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where supply and demand curves intersect.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price; often leads to price reductions.

Shortage

A situation in which demand for a good or service exceeds the supply available at a specific price. This can lead to long lines, increased prices, or both.

Demand Schedule

A table that lists the quantity of a good a consumer will purchase at various prices in a market.