Assuming the same expiration date, an option with a ____ exercise price has a ____ call option premium and a ____ put option premium.

Question

Quizplus · Accepted Answer

Options with higher exercise prices are less valuable because they are less likely to be in-the-money. Therefore, call options with higher exercise prices have lower premiums, while put options with higher exercise prices have higher premiums. This is because put options give the holder the right to sell the underlying asset at the exercise price, which becomes more valuable as the exercise price increases.

Assuming the Same Expiration Date, an Option with a ____