All of the following will lead to an increase of the market value of a call option except:
A) The price of the underlying increases.
B) The exercise price of the option contract increases.
C) The volatility of the continuously compounded rate of return on the underlying stock increases.
D) The time remaining to the expiration of the option increases

Question

Quizplus · Accepted Answer

An increase in the exercise price of the option contract typically leads to a decrease in the market value of a call option, as it becomes more expensive for the option holder to buy the underlying asset at a higher strike price. Options become less attractive as the strike price increases, contrary to the effects of the other listed factors.

All of the Following Will Lead to an Increase of the Market