Which of the Following Will Produce the Highest Call Price

question 60

Multiple Choice

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

• A) $40 exercise price; 30 days to option expiration.
• B) $40 exercise price; 40 days to option expiration.
• C) $45 exercise price; 30 days to option expiration.
• D) $45 exercise price; 40 days to option expiration.
• E) Insufficient information to answer this question.

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Definitions:

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The last dividend payment made by a company to its shareholders for a fiscal year, after the company's final annual earnings are known.

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A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.