For European Options,what Is the Effect of an Increase in S_t

question 28

Multiple Choice

For European options,what is the effect of an increase in S_t?

• A)Decrease the value of calls and puts ceteris paribus
• B)Increase the value of calls and puts ceteris paribus
• C)Decrease the value of calls,increase the value of puts ceteris paribus
• D)Increase the value of calls,decrease the value of puts ceteris paribus

---

Definitions:

Reciprocity

A social rule where if someone gives you something, you feel an obligation to give something back.

Propinquity

Refers to the physical or psychological proximity between people that often leads to friendship or other relationships.

Just-world Hypothesis

The belief in a fair world where individuals get what they deserve, serving as a way to rationalize inequality and misfortune.

Reciprocity Model

A social psychology concept that suggests individuals are more likely to help others who have helped them in the past.