The value of an otherwise identical call option is ________ if the stock price is ________.
A)higher,higher
B)lower,higher
C)higher,lower
D)unchanged,higher
E)unchanged,lower

Question

Quizplus · Accepted Answer

The value of a call option is higher when the stock price is higher because the option holder has the right to buy the stock at a lower exercise price and sell it at a higher market price, resulting in a higher profit. When the stock price is lower, the option holder would not want to exercise the option and would let it expire, resulting in a lower value for the option.

The Value of an Otherwise Identical Call Option Is ________