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Cazden Motors' stock is trading at $30 a share. Call options on the company's stock are also available, some with a strike price of $25
Cazden Motors' stock is trading at $30 a share. Call options on the company's stock are also available, some with a strike price of $25 and some with a strike price of $35. Both options expire in three months. Which of the following best describes the value of these options?
The options with the $25 strike price will sell for less than the options with the $35 strike price. | |
The options with the $25 strike price have an exercise value greater than $5. | |
The options with the $35 strike price have an exercise value greater than $0. | |
If Cazden's stock price rose by $5, the exercise value of the options with the $25 strike price would also increase by $5. | |
The options with the $25 strike price will sell for $5. |
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