Which one of the following should decrease the value of a call option?
A) Increasing the volatility of the overall stock market.
B) Increasing the range of expected returns on an underlying security.
C) Increasing the time period until the option expires.
D) Decreasing the exercise price of the call option.
E) Decreasing the market value of the underlying security.

Question

Quizplus · Accepted Answer

Decreasing the market value of the underlying security reduces the likelihood that a call option (the right to buy the security at a predetermined price) will be exercised profitably, thus decreasing its value.

Which One of the Following Should Decrease the Value of a Call