Which of the following correctly identifies the impact of these changes on the call option of Tele-Tech Com?
A) Both changes cause the price of the call option to decrease.
B) Both changes cause the price of the call option to increase.
C) The volatility normally will have a negative effect on the price of the call option while the lower price of the stock will cause the price of the call option to increase.
D) The volatility normally will have a positive effect on the price of the call option while the lower price of the stock will cause the price of the call option to decrease.
E) Volatility has no direct effect on the price of the call option while the lower price of the stock will cause the price of the call option to decrease.
Correct Answer:
Verified
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