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:

Real Terms

Adjusting financial figures to account for inflation, to reflect the actual purchasing power.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, and jurisdiction.

Deflation

A decrease in the general price level of goods and services, often indicating an economy in decline.

Farmers

Individuals engaged in agricultural activities, aimed at producing food and other crops.