The value of an otherwise identical call option is ________ if the exercise price the holder must pay to buy the share is ________.
A)lower, lower
B)higher, lower
C)higher, higher
D)None of the above.

Question

Quizplus · Accepted Answer

A call option gives the holder the right to buy a share at a certain price. If the exercise price is lower, the option is more valuable because it allows the holder to buy the share at a lower price than the market value.

The Value of an Otherwise Identical Call Option Is ________