Which of the following will increase the value of a call option?
A)a decrease in the time to maturity
B)a decrease in the stock price
C)a decrease in the stock's volatility
D)a decrease in the exercise price
E)a decrease in the risk-free rate

Question

Quizplus · Accepted Answer

A decrease in the exercise price will make the option more valuable as there is a higher likelihood of the option ending up in-the-money and being exercised.

Which of the Following Will Increase the Value of a Call