As the price of the underlying asset increases, the price of a:
A) Call increase.
B) Put decreases.
C) Call decreases.
D) a and b only.
E) b and c only.

Question

Quizplus · Accepted Answer

The price of a call option increases with the increase in the price of the underlying asset because the option becomes more valuable. Conversely, the price of a put option decreases as the underlying asset's price increases because the option becomes less valuable.

As the Price of the Underlying Asset Increases, the Price