For a bond put option,the _____ the exercise price,the greater the cost of the put,and for a bond call option,the _____ the exercise price,the higher the cost of the call option.

Question

Quizplus · Accepted Answer

For a bond put option, a higher exercise price means the option is more valuable, as it allows selling the bond at a higher price, thus increasing the cost. For a bond call option, a lower exercise price makes the option more valuable, as it allows buying the bond at a lower price, thus increasing the cost.

For a Bond Put Option,the _____ the Exercise Price,the Greater