All Else the Same, an Increase in the Time to Maturity

question 80

Multiple Choice

All else the same, an increase in the time to maturity will __________ the price of a call option and __________ the price of a put option.

• A) increase; increase
• B) increase; decrease
• C) decrease; decrease
• D) decrease; increase
• E) not affect; not affect

---

Definitions:

Euphoric

A state of intense happiness and excitement.

Lithium

A mood-stabilizing drug commonly used to treat bipolar disorder and prevent episodes of mania and depression.

Maintain Normal

Refers to keeping or continuing usual or expected conditions, often concerning health, environment, or operations.

Divalproex

A medication used to treat seizure disorders, bipolar disorder, and to prevent migraine headaches.