Which of the following most likely decreases the value of a call option?
A) The price of the underlying decreases.
B) The volatility of the underlying increases.
C) Time to expiry of the call option increases.
D) The underlying discontinues dividend payments.

Question

Quizplus · Accepted Answer

The value of a call option decreases when the price of the underlying asset decreases, as the likelihood of the option being in-the-money (profitable to exercise) is reduced.

Which of the Following Most Likely Decreases the Value of a Call