The price of a call option increases while its exercise price decreases.

Name: The price of a call option increases while its exercise price decreases.
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Question

Quizplus · Accepted Answer

This is known as an inverse relationship between the price of the option and its exercise price. When the exercise price decreases, it becomes easier and more profitable for the holder of the call option to exercise it, leading to an increase in demand for the option and, in turn, an increase in its price.

The Price of a Call Option Increases While Its Exercise