[amp_mcq option1=”option value equal to one” option2=”option value will increase” option3=”option value will decrease” option4=”option value equal to zero” correct=”option2″]<\/p>\n
The correct answer is B. option value will increase.<\/p>\n
An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date. The price at which the option can be exercised is called the strike price. The date by which the option must be exercised is called the expiration date.<\/p>\n
The value of an option is determined by a number of factors, including the strike price, the expiration date, the volatility of the underlying asset, and the interest rate. When the current price of the underlying asset is higher than the strike price, the option is said to be in the money. When the current price of the underlying asset is lower than the strike price, the option is said to be out of the money.<\/p>\n
If the current price of the underlying asset increases, the value of an option in the money will increase. This is because the buyer of the option will have a greater chance of making a profit by exercising the option. The value of an option out of the money will also increase, but to a lesser extent. This is because the buyer of the option will have a lower chance of making a profit by exercising the option.<\/p>\n
In conclusion, if the current price increases from lower to higher, then an option value will increase.<\/p>\n","protected":false},"excerpt":{"rendered":"
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