As the underlying stock's price increased, the call option valuation function's slope approaches
A)zero.
B)one.
C)two times the value of the stock.
D)one-half the value of the stock.

Question

Quizplus · Accepted Answer

The slope of the call option valuation function approaches one as the underlying stock's price increases, because as the price of the stock rises, the option becomes more valuable and the change in its value becomes more closely tied to the change in the stock's value.

As the Underlying Stock's Price Increased, the Call Option Valuation