An increase in which one of the following will decrease the value of a call option?
A)Interest rate
B)Exercise price
C)Time to expiration
D)Stock volatility
E)Underlying asset price

Question

Quizplus · Accepted Answer

An increase in the exercise price will decrease the value of a call option as it becomes less likely for the stock to reach that price and for the option to be exercised. An increase in interest rates, time to expiration, stock volatility, or underlying asset price typically increase the value of a call option.

An Increase in Which One of the Following Will Decrease