If the price of the underlying asset increases, what happens to the value of call and put options?

Question

Quizplus · Accepted Answer

If the price of the underlying asset increases, the value of call options will increase because it gives the holder the right to buy the asset at a lower price than the current market price. On the other hand, the value of put options will decrease because it gives the holder the right to sell the asset at a higher price than the current market price. Therefore, option B is the correct answer.

If the Price of the Underlying Asset Increases, What Happens