What Happens to the Value of Call and Put Options

question 46

Multiple Choice

What happens to the value of call and put options, with everything else held constant, if the risk-free interest rate increases?

• A) Call options will be worth more, put options will be worth less.
• B) Call options will be worth less, put options will be worth more.
• C) Both call and put options will be worth less.
• D) Both call and put options will be worth more.

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Definitions:

President Lincoln

Abraham Lincoln, the 16th President of the United States (1861-1865), known for leading the country during the Civil War and issuing the Emancipation Proclamation.

Union War Effort

The collective measures and actions taken by the Northern states during the American Civil War, including raising armies, procuring supplies, and managing resources to defeat the Confederacy.

Civil War

In the United States, refers to the conflict between the Northern states (Union) and the Southern secessionist states (Confederacy) from 1861 to 1865, primarily over issues of slavery and states' rights.

Northern Society

A secret revolutionary organization in the early 19th century in Russia, which aimed at overthrowing the autocracy and implementing constitutional reforms.