The value of an otherwise identical call option is ________ if the stock price is ________.
A) higher, higher
B) lower, higher
C) higher, lower
D) none of the above

Question

Quizplus · Accepted Answer

The value of a call option increases as the stock price increases because the holder of the call option has the right to buy the stock at a lower price and sell it for a higher price. Therefore, if the stock price is higher, the value of the call option is also higher.

The Value of an Otherwise Identical Call Option Is ________