Which of the Following Changes, Everything Else Held Constant, Will

question 83

Multiple Choice

Which of the following changes, everything else held constant, will increase the value of a call option?

• A) The value of the underlying asset becomes more volatile
• B) The price of the underlying asset goes down
• C) Getting closer to the expiration date (the passage of time)
• D) A higher strike price

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Definitions:

Fundamental Cause

A primary or underlying factor that is responsible for a particular event, condition, or phenomenon.

Pricing Practice

The methods and strategies used by businesses to set and adjust prices for their products or services.

Average Revenue

The amount of money a company makes per unit of goods or services sold, calculated by dividing total revenue by the number of units sold.

Distributed Team

A group of individuals who work together from different geographical locations, often coordinating their efforts through technology.