The Value of a Call Option Increases as the Time

question 72

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 exceed the exercise price.
• C) the dividends accumulate while waiting to be paid.
• D) the option can be repeatedly exercised.

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Definitions:

Interneurons

Interneurons are neurons that connect sensory and motor neurons, enabling communication within the central nervous system.

Afferent Nerves

Nerves that carry sensory signals from organs and tissues in the body to the brain or spinal cord.

Efferent Nerves

Nerves that carry signals away from the central nervous system to effectors such as muscles and glands, essentially facilitating action and response.

Blood Oxygen Level Dependent (BOLD)

A measure used in functional magnetic resonance imaging (fMRI) to observe brain activity by detecting changes in blood oxygenation.