The value of a listed call option on a stock is lower when _______________.
I.the exercise price is higher
II.the contract approaches maturity
III.the stock decreases in value
IV.a stock split occurs
A) II, III and IV only
B) I, III and IV only
C) I, II and III only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

A call option's value decreases when the exercise price is higher, the contract approaches maturity, and the stock decreases in value. A stock split does not inherently lower the value of a call option.

The Value of a Listed Call Option on a Stock