Increase the market value of put option and call option

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Reference no: EM131904191

1. A(n) ____ will increase the market value of a put option.

a. interest rate change. b. increase in the dividend rate of the underlying stock. c. decrease in the volatility of the underlying stock. d. decrease in the earnings rate of the underlying stock.

2. A(n) ____ will increase the market value of a call option.

a. decrease in the announced dividend amount. b. decrease in the time to expiration. c. decrease in the volatility of the underlying stock. d. increase in the interest rate.

3. The higher the amount of dividends a stock pays, the

a. the lower its dividend yield. b. the higher the value of a call option. c. the value of a call will increase immediately after the ex-dividend day. d. the lower the value of a call option.

Reference no: EM131904191

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