Which one of the following call options would command the higher premium, other things equal? (All months are within the same calendar year.)
A) October expiration, $45 strike price
B) December expiration, $40 strike price
C) March expiration, $45 strike price
D)June expiration, $40 strike price

Question

Quizplus · Accepted Answer

The call option with the later expiration date (December) and lower strike price ($40) would command a higher premium, all else equal, as it provides the buyer with more time for the underlying asset to increase in value and allows for a greater chance of the option being in-the-money at expiration.

Which One of the Following Call Options Would Command the Higher