The Value of a Call Option Increases with All of the Following

question 42

Multiple Choice

The value of a call option increases with all of the following except ________.

• A)share price
• B)time to maturity
• C)volatility
• D)dividend yield

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Definitions:

Cash Payment

A transfer of cash from one party to another, often as payment for goods or services.

Bond Discount Amortization

This is the process of gradually expensing the difference between a bond's face value and its purchase price over its life, reflecting an increase in the bond's book value.

Straight-Line Amortization

A method of uniformly reducing the book value of an intangible asset over its useful life.

Interest Expense

The expenditure faced by a company for financing through borrowed resources during a defined time.