The Value of a Listed Call Option on a Stock

question 89

Multiple Choice

The value of a listed call option on a stock is lower when:
I. The exercise price is higher.
II. The contract approaches maturity.
III. The stock decreases in value.
IV. A stock split occurs.

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

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Definitions:

Friendship

A social bond characterized by mutual affection, trust, and support between individuals.

Generosity

The quality of being kind and generous, characterized by a willingness to give freely and help others without expecting anything in return.

Social Expectations

The perceived norms or behaviors that are considered acceptable or typical within a society or group.

Intellectual Functioning

Intellectual functioning refers to the cognitive capabilities of an individual, including problem-solving, learning, planning, and abstract thinking.