How does the price of a call option respond to the following changes, other things equal? Does
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How does the price of a call option respond to the following changes, other things equal?
Does the call price go up or down?
a. Stock price increases.
b. Exercise price is increased.
c. Risk-free rate increases.
d. Expiration date of the option is extended.
e. Volatility of the stock price falls.
f. Time passes, so the option’s expiration date comes closer.
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