As the risk free rate of return increases, the value of call options [blank] and the value of put options [blank].

Name: As the risk free rate of return increases, the value of call options [blank] and the value of put options [blank].
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Question

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As the risk-free rate increases, the present value of the exercise price decreases, making call options more valuable. Conversely, put options become less valuable as the cost of carrying the exercise price increases.

As the Risk Free Rate of Return Increases, the Value