Which of the Following Changes, When Considered Individually, Will Increase

question 80

Multiple Choice

Which of the following changes, when considered individually, will increase the value of a put option?

• A) An increase in the risk-free interest rate
• B) Lower volatility of the price of the underlying asset
• C) A higher strike price
• D) The option is nearing its expiration date.

---

Definitions:

Currencies

Forms of money that are issued by governments and used as a medium of exchange for goods and services in economic transactions.

Interest Rates

The percentage charged on the total amount borrowed or earned, reflecting the cost of borrowing or the yield on investments.

Commodities

Raw materials or primary agricultural products that can be bought and sold.

Futures Exchange

A Futures Exchange is a central marketplace where people can trade standardized futures contracts; that is, contracts to buy or sell assets at a future date at an agreed-upon price.