Which of These Will Increase the Value of a Call

question 10

Multiple Choice

Which of these will increase the value of a call option? I.An increase in the market value of the underlying asset
II.An increase in the option's strike price
III.A decrease in the market value of the underlying asset
IV.A decrease in the option's strike price

• A)I and II only
• B)II only
• C)II and III only
• D)I and IV only
• E)I only

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Definitions:

Holistic Thinking

A cognitive approach focusing on the whole rather than its constituent parts, and understanding systems or phenomena as integrated wholes.

Relational Thinking

A cognitive process that involves identifying connections and relationships between objects, ideas, or situations.

Dialectical Thinking

A method of thought that involves holding two opposing points of view in mind at the same time to reach a synthesis or integration of the two.

Categorical Thinking

A cognitive process that involves organizing information into categories for easier understanding and decision-making, sometimes at the expense of recognizing unique or nuanced differences.