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

Question

Quizplus · Accepted Answer

The value of a call option is higher if the strike price the holder must pay to buy the stock is lower, as the holder has the right to buy the stock at a lower price than the current market price. Therefore, if the strike price is higher, the value of the call option decreases.

The Value of an Otherwise Identical Call Option Is ________