Question
Star Pharma stock is currently trading at $30 per share. There are various call options on the company's stock. One of them has a strike
Star Pharma stock is currently trading at $30 per share. There are various call options on the company's stock. One of them has a strike price of $25 and another has a strike price of $35. Both options expire in six months. Which of the following statements best describes the value of these options?
If Star's stock price rose by $5, the exercise value of the options that has $25 strike price will also increase by $5.
The options that has $25 strike price will sell for less than the options that has $35 strike price
The option that has $35 strike price have an exercise value greater than $0.
The options with the $25 strike price will be priced at $5.
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