When does a change in the value of a call option come the closest to matching the price change in a share of stock?
A) When the stock is priced far above the strike price
B) When the stock is priced far below the strike price
C) When the stock is priced near zero
D)Changes in call value always come close to matching changes in stock price.

Question

Quizplus · Accepted Answer

When the stock is priced far above the strike price, the call option behaves more like the stock itself, meaning changes in the stock price will closely reflect in the call option's value. This is because the option is deep in-the-money, making it almost certain to be exercised.

When Does a Change in the Value of a Call