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

Question

Quizplus · Accepted Answer

All else equal, as the underlying stock price increases, the call option becomes more valuable as it gives the holder the right to buy the stock at a lower price than the current market price. Therefore, the call price increases.

All Else Equal, as the Underlying Stock Price Increases