Which of the Following Events Is Likely to Decrease the Value

question 34

Multiple Choice

Which of the following events is likely to decrease the value of call options on the common stock of GCC Company?

• A) An increase in GCC's stock price.
• B) An increase in the exercise price of the option.
• C) An increase in the amount of time until the option expires.
• D) An increase in the risk-free rate.
• E) GCC's stock price becomes more risky (higher variance).

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Definitions:

Resting Potential

The difference in electric charge across the neuronal membrane when the neuron is not actively sending a signal, crucial for the initiation of nerve impulses.

Excitatory Postsynaptic Potential

A temporary increase in postsynaptic membrane potential due to the flow of positively charged ions into the postsynaptic cell, making it more likely to fire an action potential.

Action Potential

A momentary change in electrical potential on the surface of a neuron or muscle cell, allowing the transmission of signals.

Repolarization

A phase in the cardiac cycle or neural activity where the cell membrane returns to its resting potential after depolarization.