Identify the Correct Statement Related to the Choice of Exercise

question 18

Multiple Choice

Identify the correct statement related to the choice of exercise price for buying a call.

• A)the higher the exercise price the higher the call premium
• B)the lower the exercise price the more likely the call option will expire out-of-the-money
• C)A higher strike price results in smaller gains on the upside but smaller losses on the downside
• D)the higher the exercise price the more dividends contribute to the overall profit
• E)none of the above are correct statements related to the choice of exercise price for buying a call