Which Option Price(s)will Increase When the Dividend Yield Increases

question 3

Multiple Choice

Which option price(s) will increase when the dividend yield increases?

• A)both the call and put
• B)call only
• C)put only
• D)neither the call nor the put
• E)Answer cannot be determined from the information provided.

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Definitions:

Exports

Goods or services sent from one country to another for sale or trade.

Significant Influence

The power to participate in financial and operating policy decisions of another entity without having control over it.

Dividends

Distributions from a company's earnings given to its shareholders by the corporation.

Net Income

The residual income of a company, which is calculated after expenses and taxes have been subtracted from total revenue.