A Longer Time to Maturity Will Unambiguously Increase the Value

question 33

Multiple Choice

A longer time to maturity will unambiguously increase the value of a call option because:
I. The longer maturity time reduces the effect of a dividend on call price.
II. With a longer time to maturity the present value of the exercise price falls.
III. With a longer time to maturity the range of possible stock prices at expiration increases.

• A) I only
• B) I and II only
• C) II and III only
• D) I, II, and III

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Definitions:

Effective Communication

The conveyance and reception of ideas, messages, or information through appropriate channels, ensuring clarity and mutual understanding.

Intergroup Conflict

A situation where groups within an organization or society are in disagreement or conflict with each other, often due to competing interests or goals.

Conflict Sources

Factors or situations that can lead to disagreements or disputes within a group or organization.

Cultural Effects

The impact of a society's culture on the values, behaviors, and perceptions of its members.