Which one of the following changes will reduce the value of a call option?
A) An increase in the stock price
B) An increase in the exercise price
C) An increase in the volatility of the stock price
D) An increase in interest rates

Question

Quizplus · Accepted Answer

An increase in the exercise price (the price at which the option can be exercised) will reduce the value of a call option as it makes it less likely for the option to be exercised and the holder to make a profit. The other options listed would generally increase the value of a call option.

Which One of the Following Changes Will Reduce the Value