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

question 65

Multiple Choice

Which of the following changes, when considered individually, 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:

Investment

The allocation of resources, usually money, in order to gain profitable returns as interest, income, or appreciation in value.

Workers

Individuals who perform tasks or jobs for pay, ranging from manual labor to professional occupations.

Units

In economics, units refer to the quantifiable measures used to express the quantity of an item, such as pieces, kilograms, liters, etc., used in transactions or production.

Total Cost

The complete cost of production, encompassing both fixed and variable costs, for a good or service.