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Which of the Following Increase(s)the Time Premium of a Call

question 99

Multiple Choice

Which of the following increase(s) the time premium of a call option?
I.a market price that exceeds the strike price
II.increasing volatility in the market price of the underlying security
III.decreasing market interest rates
IV.decreasing the time to option expiration


Definitions:

Rescission

The act of revoking, canceling, or repealing a contract, returning all parties involved to their pre-contractual state.

Discharged

Released or relieved from a duty, obligation, or liability, often used in legal or financial contexts.

Punitive Damages

Compensation awarded to a plaintiff beyond actual damages to punish the defendant for egregious conduct and deter future similar acts.

Substantial Performance

A principle in contract law that allows a contracting party to be considered as having fulfilled its obligations, so long as the crucial elements of the contract have been completed, even if minor details are unfinished.

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