With Everything Else Held Constant, What Happens to the Value

question 61

Multiple Choice

With everything else held constant, what happens to the value of call and put options 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:

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