An increase in which one of the following will reduce the value of a call option?
A) Interest rate
B) Time to expiration
C) Volatility of stock price
D) Exercise price

Question

Quizplus · Accepted Answer

An increase in exercise price (strike price) will increase the cost of purchasing the underlying asset and therefore reduce the value of a call option, as it becomes less profitable to exercise the option at expiration.

An Increase in Which One of the Following Will Reduce