Which One of the Following Situations Will Produce the Highest

question 68

Multiple Choice

Which one of the following situations will produce the highest call price, all else constant? Assume the options are all in the money.

• A)$20 strike price; 45 days to option expiration
• B)$20 strike price; 60 days to option expiration
• C)$25 strike price; 45 days to option expiration
• D)$25 strike price; 60 days to option expiration
• E)Insufficient information is provided to answer this question.

---

Definitions:

Interest Earned

Income received from investments in interest-bearing accounts or securities, such as savings accounts, bonds, or loan interest.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.

Personal Expense

Expenses incurred by individuals for non-business-related activities, often not tax-deductible.

Goodwill Method

An accounting approach for handling goodwill during a business combination, where goodwill is not amortized but tested annually for impairment.