Chapter 03 · Section 3.1

Underlying price increase

What effect would an increase in the price of the underlying increase asset have on the premium of an option?

a) The Put premium would increase
• b) The Call premium would increase
  No. That is correct, but what about the answer for the put?
  c) The Put premium would decrease
  d) The Call premium would decrease
  e) a and d
  f) b and c

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