All else equal, as the underlying stock price increases:
A)the put price increases.
B)the put price decreases.
C)there is no effect on put price.
D)the put price can either increase, decrease, or remain the same.

Question

Quizplus · Accepted Answer

When the underlying stock price increases, the probability of the stock price falling below the strike price decreases. Therefore, the option becomes less likely to be exercised and the put price decreases.

All Else Equal, as the Underlying Stock Price Increases