Which One of the Following Statements Concerning the Relationship Between

question 70

Multiple Choice

Which one of the following statements concerning the relationship between time to option maturity and call and put prices is correct?

• A)Put and call prices increase at the same rate as the time to option maturity increases.
• B)Put prices and time to maturity are inversely related.
• C)Call prices tend to increase faster than put prices as the time to option maturity increases.
• D)Put prices increase while call prices remain constant as the time to option maturity increases.
• E)Call prices are inversely related to time to maturity.

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Definitions:

Electrons

Particles within atoms that carry a negative electrical charge and serve as the main conductors of electrical current in solids.

Covalent Bonds

A type of chemical bond involving the sharing of electron pairs between atoms, which results in a stable balance of attractive and repulsive forces between atoms.

Atom

The basic unit of a chemical element, consisting of a nucleus of protons and neutrons, with electrons orbiting around it.

Substance

A form of matter with a specific chemical composition and set of properties that distinguish it from other forms of matter.