Stock prices and call option prices are
A) Unrelated
B) Negatively correlated
C) Directly related
D) Perfectly related
E) Inversely related

Question

Quizplus · Accepted Answer

Stock prices and call option prices are directly related. As the stock price increases, the call option price also increases, and vice versa. This can be attributed to the fact that call options give the holder the right to buy the underlying stock at a certain price, and as the stock price increases, the potential profit for the holder of the call option also increases.

Stock Prices and Call Option Prices Are