If a Stock Price Increases, the Price of a Put

question 38

Multiple Choice

If a stock price increases, the price of a put option on the stock will ________ and the price of a call option on the stock will ________.

• A) decrease; decrease
• B) decrease; increase
• C) increase; decrease
• D) increase; increase

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Definitions:

Aesthetic Needs

A psychological requirement for beauty and visually pleasing experiences, as part of Maslow's hierarchy of needs.

Hierarchy of Needs

A psychological theory proposed by Abraham Maslow that categorizes human needs into five hierarchical levels, from basic physiological needs to self-actualization.

Maslow's Hierarchy

A psychological theory proposed by Abraham Maslow that outlines a five-tier model of human needs, from basic (physiological) to more complex (self-actualization) needs.

Assumptions

Beliefs or ideas taken for granted without any proof or surety, often used as bases for reasoning and decision-making.