All else equal, call option values are ________ if the ________ is lower.
A)higher; share price
B)higher; exercise price
C)lower; dividend payout
D)lower; share volatility

Question

Quizplus · Accepted Answer

Call option values are higher when the exercise price is lower. This is because a lower exercise price increases the chance that the option will be profitable, which makes it more valuable. The other answer choices are incorrect because share price, dividend payout, and share volatility all have different effects on call option values.

All Else Equal, Call Option Values Are ________ If the ________

All Else Equal, Call Option Values Are If the