12. All else the same, the value of a call option decreases _______________. A)

Question

12. All else the same, the value of a call option decreases _______________. A) with increases in the underlying asset price B) with decreases in the exercise price C) with decreases in the risk-free interest rate D) the less out-of-the-money the option becomes E) with increases in the time to expiration 12. All else the same, the value of a call option decreases _______________. A) with increases in the underlying asset price B) with decreases in the exercise price C) with decreases in the risk-free interest rate D) the less out-of-the-money the option becomes E) with increases in the time to expiration A) with increases in the underlying asset price B) with decreases in the exercise price C) with decreases in the risk-free interest rate D) the less out-of-the-money the option becomes E) with increases in the time to expiration A) with increases in the underlying asset price B) with decreases in the exercise price C) with decreases in the risk-free interest rate D) the less out-of-the-money the option becomes E) with increases in the time to expiration

Explanation / Answer

Answer:

All else the same, the value of a call option decreases:

Answer: D) the less out-of- the-money the option becomes

Because the strike price becomes less favorable

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